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Water supply and demand management

The government must take more concerted action now to prevent parts of southern England running out of water within 20 years, according to a National Audit Office (NAO) report published today.

The country’s total water supply is forecast to drop by 7% by 2045 because of climate change and the limits of sustainable abstraction.1 Almost all of the public water supply is obtained through abstraction from ground and surface water sources, but abstracting too much water can lead to physical changes that reduce biodiversity.

Even at current levels of average rainfall, a reduction of 480 million litres per day of water consumption is needed nationally within 25 years to restore abstraction to sustainable levels. Drier weather is forecast to further reduce water supplies by 600 million litres per day. Taken together therefore, water sourced through abstraction nationally each day is due to decline by over a billion litres over the next 25 years. This means that, without action, some parts of the country – particularly the South East – will run out of water.

Reducing demand is essential to prevent water shortages. Over the last five years, water companies have made little or no progress in reducing water consumption and cutting leakage. Water companies have signed up to reduce leakage by 15% or more by 2025 but there is a risk that they may not meet these targets and government should monitor progress to ensure that water companies have contingency plans.

Efforts to reduce water consumption with the public and businesses have not been successful. The government committed to announcing a personal water consumption target by the end of 2018, but has not yet done so. It has relied on water companies to get its message across about the importance of reducing water consumption, but there is no evidence this has had any impact on consumer behaviour and average consumption continues to rise. Government attempts to reduce non-household water consumption through increased competition have also not succeeded.

Water companies need to work together across geographical boundaries to improve the resilience of the water supply. The government has taken positive steps to encourage this by publishing a national planning framework which aims to bring together industry, regulators and government to develop regional plans by the end of 2021. But so far there has been only limited collaboration and most companies continue to develop solutions largely within their own geographical area.

The report concludes Defra should promote a more coherent and credible message about water efficiency and develop a plan to evaluate its impact. The government should lead on getting the message across that consumers need to save water.

Defra should identify opportunities to work with other government departments to reduce water consumption by large public sector users, like hospitals and schools. It should also better understand how willing customers are to pay more to improve water infrastructure. This involves reviewing water companies’ customer research and commissioning its own, if necessary.

Defra, the regulator Ofwat and the Environment Agency should regularly review water companies’ progress on reducing consumption and leakage, the report recommends.

“The government has made limited progress on reducing water consumption, tackling leakage and sharing water resources between regions in the last five years, but rapid progress is now vital for the government to deliver its objective of a resilient water supply. Defra needs to provide stronger leadership to water companies, regulators and consumers.”

Gareth Davies, head of the NAO

Notes for Editors

Key facts

14bn litres
daily demand for water in England and Wales in 2018

20%
proportion of water lost to leakage, equivalent to 3bn litres each day

4bn litres
additional water supply needed per day by 2050 to counter the growing risk of drought from climate change

1.08bn
litres per day of supply lost by 2045 to climate change and the need to restore abstraction to sustainable levels

4%
proportion of water supplied by trading between water companies

£469m
value of fund established by Ofwat in July 2019 to allow water companies to work together to develop strategic water resource solutions

16%
reduction in leakage Ofwat expects water companies to achieve between 2020 and 2025

12%
average reduction in consumer bills that Ofwat expects by 2025

143 litres
average daily consumption of water per person for England in 2018-19: this has increased each year since 2014-15

 

  1. Abstraction is the process of taking water out of the ground or from surface water bodies, such as rivers or lakes, and is how most water is sourced by water companies. The Environment Agency (EA) manages abstraction in England by granting licences to abstractors. Water companies are licensed to take close to 15 billion litres of water per day from non-tidal water bodies, 51% of the total abstracted in 2017, with the remainder mostly used by the power sector and industry. This water is then treated and distributed through pipes to homes and businesses.
  2. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
  3. The National Audit Office (NAO) helps Parliament hold government to account for the way it spends public money. It is independent of government and the civil service. The Comptroller and Auditor General (C&AG), Gareth Davies, is an Officer of the House of Commons and leads the NAO. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether government is delivering value for money on behalf of the public, concluding on whether resources have been used efficiently, effectively and with economy. The NAO identifies ways that government can make better use of public money to improve people's lives. It measures this impact annually. In 2018 the NAO's work led to a positive financial impact through reduced costs, improved service delivery, or other benefits to citizens, of £539 million.

Contact

NAO Press Office
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk

PN: 16/20