Management, Procurement and Law Proceedings of the Institution of Civil Engineers

Management, Procurement and Law 165

Volume 165 Issue MP3
August 2012 Issue MP3
Pages 159–171 http://dx.doi.org/10.1680/mpal.11.00044
‘New Water Architecture’: an integrated Paper 1100044
water management model Received 14/08/2011 Accepted 10/02/2012
Norton and Lane
Keywords: water supply/waterways & canals

ICE Publishing: All rights reserved

‘New Water Architecture’:

an integrated water
management model
g
1 Michael Norton MBE, BSc (Hons), FICE, FCIWEM, MIWA g
2 Alexander Lane BSc (Hons)
Global Water Director, AMEC Environment & Infrastructure, Bristol, UK Experienced Water Consultant, Halcrow Pacific Pty Ltd, Brisbane,
Australia

An integrated framework for the management of water in England and Wales is proposed that optimises the organ-
isation of service infrastructure, customers and stakeholders to derive optimal social, economic and environmental
health. ‘New Water Architecture’ recognises the intrinsic links between water stakeholders, and between water and
other essential resources, particularly food, energy and biodiversity. A systems-based approach strengthens
integration of physical infrastructure, controlling institutions, and the overarching society consensus. Consideration
is also given to future pressures with resilience to climate change strengthened by initiatives that slow water
passage across the landscape. Implementation of the framework requires coordinated water policy across tradition-
ally discrete resource sectors. This need is investigated alongside specific initiatives related to system management,
abstraction licensing and pricing. Capital investment should be targeted towards ‘low-regret’ infrastructure argued
to be high flow storage, aquifer storage and recovery, sustainable drainage systems and water transfers. These
examples deliver multiple benefits and can be further optimised if existing networks, particularly inland waterways,
are revitalised to enable regional integration of water sources.

1. Introduction food, energy and biodiversity is lacking. An overarching

Water is the fundamental essential resource. It is the primary
control upon public health and crucial to the continued security
of many of the commodities upon which society and the
national economy depend. Availability of water underpins
food production, enables vital industrial processes, sustains
ecosystem services (the processes by which the environment
produces resources utilised by humans), and provides leisure
and amenity for communities. In turn, our demands and sub-
sequent use of water degrade its quality and necessitate
energy-intensive treatment.
The intrinsic relationships between water and the production
and use of other resources are now widely cited (see Defra
(2011a) for example) and their prevalence within policy is
beginning to increase. The trend is however piecemeal and
incoherent, with the water strategies of one government depart-
ment often contradicted, amended or ignored in another. As a
result, in England and Wales, a water management framework
that appropriately considers the interface with resources such as
strategy would improve industry-wide and public understand-
ing of the scarcity element of water, in turn enabling educated
and proportional responses to pressures that are increasing in
both their number and severity.
The concepts proposed and elaborated in this paper are
intended to stimulate much-needed debate. Traditionally
restricted dialogue between water specialists must move outside
this ‘water box’ (World Water Assessment Programme, 2009) to
engage wider stakeholders, policy-makers and influencers. The
ideas explored herein are open to challenge and not claimed to
represent a universal solution. Such silver bullets do not exist
and trade-offs will be an inevitable element of future planning.
2. Context
2.1 Regulation
Since 1989, drinking water and waste water services in England
and Wales have been provided by private companies that

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possess geographic monopolies over their respective service
areas. Economic and performance regulation of the sector is
performed by Ofwat and the Environment Agency, and the
Drinking Water Inspectorate have roles to safeguard drinking
water quality, surface water quality and sustainable use of
water resources. Although the current system has demonstrated
considerable benefits, given uncertainties and pressures
associated with future climate change and increased demand it
is now described by the Environment Agency (2009a) as unfit
for purpose (weaknesses also identified by Defra (2011a)). In
his 2011 Gerald Lacey lecture, Professor David Grey
highlighted six factors influential in enabling water systems to
deliver growth and equity (Grey, 2011). Table 1 considers the
state of the sector against each in turn.
2.2 Current and future pressures
Several regions of England and Wales are experiencing increas-
ing pressure on their water resources. Although national supply
capability is sufficient to meet demand, regional imbalances
mean that whereas much of the west possesses a water surplus,
many water resource zones in the south-east are classified
as ‘seriously water stressed’ (Environment Agency, 2008).
Average effective rainfall varies significantly (Figure 1), creating
problems for water supply that are exacerbated by dense
populations in the relatively dry south-east. Projected trends
in climate point towards more absolute and intense rainfall
during winter, as well as to a general reduction in summer
precipitation (Figure 2), higher summer evaporation, and to
an overall decrease in groundwater recharge (UKCP09 climate
projections are available at http://ukclimateprojections.defra.
gov.uk). These changes will act to speed up overland hydro-
logical processes, promoting quicker transfer of rainfall from
its source across the landscape. As a consequence, significant
stress will be placed on existing infrastructure, both to capture
adequate water and to protect natural and built environments.
A recent study, cited by the Environment Agency (2011),
provides a national assessment of seasonal changes in river
flows and groundwater levels for the 2050s. All the considered
scenarios show a decrease in flow in summer almost everywhere
(Environment Agency, 2011). The Met Office (2011) has also
recently published predictions of future climate change and
potential impacts.
By 2020, pressures associated with a rising population could
create total drinking water demands 5% higher than today
(Defra, 2011a). The population of England is projected to
increase by 20 million by 2050 and will be characterised by
proportionally higher growth rates in the south-east. There
are also trends towards lower household occupancy and
towards more water-intensive lifestyle choices.
The demand characteristics of different water users are also
important. Although domestic consumption dominates total
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water abstractions, around 70% returns to the environment as
treated effluent thereby enhancing river flows. In contrast,
only a third of agricultural water use returns to a watercourse
(CIWEM, 2010). Abstraction for irrigation makes up less
than 1% of the total but in summer months, peak demands
for agriculture are likely to exceed domestic withdrawal in the
water-stressed south-east. Furthermore, the extent of the
UK’s reliance on domestic food products may have to rise as cli-
mate change could potentially alter growing conditions in the
countries from which it imports. Agricultural water demands
in the UK could increase 25% by 2020 (Environment Agency,
2009a). With 75% of land area already given over to agriculture
(MAFF, 2001), land use conflicts could arise.
Acting alongside these drivers are legislative pressures increas-
ingly transposed from Europe. Statutes such as the water frame-
work directive (EC, 2000) demand strict water quality
requirements and the UK’s CRC Energy Efficiency Scheme
will also require action by a water industry that produces 4
million tonnes of greenhouse gas emissions each year, almost
1% of the UK total, making it the fourth most energy-intensive
sector (Environment Agency, 2009b).
In response to these pressures, the 2009 Environment Agency
Strategy advocates ‘twin-track’ water management and focus
towards both supply and demand initiatives. Although
examples of both approaches are elaborated, clear priority is
directed towards improving the efficiency of customer water
use. Development of new supply is viewed as a ‘legitimate
response’ but water companies are expected to consider
demand management first. These measures can and should
play an important role in future strategy; however, in isolation,
they are insufficient to achieve a socially, economically, and
environmentally efficient supply–demand balance. The Water
White Paper (Defra, 2011a) makes reference to the need for
increased connectivity in the water supply system, to the trading
of abstraction licences, to the benefits of winter water storage
for agriculture, and to strong support for a catchment-based
approach to managing water quality; all sentiments that echo
closely with the concepts proposed in this paper. The recog-
nition of the importance of water to other resources, particu-
larly energy and agriculture, is also encouraging; however, the
extent of this vital reliance and therefore the need to promote
genuinely coherent policy could have been more effectively
emphasised.
3. ‘New Water Architecture’
Many commentators now recognise that the success of water
management is highly influenced by the scale at which it is con-
sidered (see CIWEM (2011a) for example). By investigating
interdependencies between stakeholders and resources at the
appropriate resolution, a systems-based approach emerges
within which actions in one domain can greatly influence
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Incentives (see Section 3.3 for further discussion on this factor)

The Environment Agency (2009a) identifies a lack of incentive within the regulatory framework that would otherwise help ensure
a sustainable water industry in the medium to long term (also Defra 2011a).
A CIWEM report (CIWEM, 2011a) argues for incentives to encourage water trading, promote concepts of ‘polluter pays’,
‘abstractor pays’ and ‘payment for environmental services’, and to encourage more appropriate valuation of water.

Information (see Section 3.2.3)

Estimates of demand and supply are based on future projections and are hence inherently uncertain. Modelling enables
consideration of multiple scenarios and allows uncertainties to be communicated.
Models should be used to address concerns that the sector fails to sufficiently consider impacts at the system scale (Fung, 2010)
and especially in relation to climate uncertainty (ASC, 2011). Examples such as IRAS-2010, developed at University College
London, are helping to promote regionally optimal management solutions.

Infrastructure (discussed throughout Section 3 but particularly Section 3.2)

Past infrastructure investments have yielded notable benefits; however, ASC (2011) suggests the sector’s capability to adapt to
climate change is close to its limit.
Research recommends investment in ‘low-regret’ initiatives which provide benefits irrespective of any one future scenario coming
to fruition. Storage facilities and measures that slow the rate of water transfer across land to watercourses are identified as long-
term sustainable solutions (for example, CIWEM (2011a)). Smaller-scale storage is identified as effective for agriculture (Knox
et al., 2010), and aquifer storage and recovery schemes also show promise (Gale et al., 2002).
A major flaw characterising existing infrastructure is its lack of connectivity. The benefits of a systems-based approach are
increasingly cited. Research by Wessex Water (2011) demonstrates the hydrological and financial benefits of catchment-wide
management.

Investment (and finance) (see Section 3.3.1)

Targeting investment towards measures such as water transfer requires changing regulation which insufficiently rewards those
companies engaged in trading (Defra, 2010).
Establishing an appropriate price for water based on its true value is recommended by almost all authors (see for example
Environment Agency, 2009a; Ofwat, 2009; Walker, 2009). This would improve the efficiency of water use and would also
provide increased investment funds.

Innovation (see reference throughout Section 3 but most explicitly within Section 3.2.4 and Section 3.3)
The current regulatory system fails to provide an enabling environment for investigating innovative management approaches.
The benefits of approaches such as increased market competition (Ofwat, 2010a), smart metering (Ofwat, 2011a), industrial
symbiosis (Mirata, 2004), waste water reuse (Durham et al., 2005) and innovative pricing structures (Walker, 2009) are well
researched but need more testing, incentivisation and public communication to ensure their widespread uptake.

Institutions (see Section 3.3)

Several authors (see for example Environment Agency, 2009a) suggest that current regulation fails to incentivise water transfer
between companies, especially to the receiving company, and instead encourages self-sufficiency in company planning.
Of critical importance is the need for joined-up policy across government departments. This is currently absent despite abundant
research indicating its importance (see for example Foresight, 2011; SIWI et al., 2005). Whereas the 2011 Water White Paper
highlights a need to understand the implications for water of food policy, the Defra 2011–15 Business Plan (Defra, 2011b)
supports increased domestic food production without mention of associated water impacts.
Table 1. Evaluation of the water sector of England and Wales

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Figure 1. Winter (a) and summer (b) effective rainfall
(Environment Agency, 2008). Contains Environment Agency
information # Environment Agency and database right
processes in another. This is the principle guiding ‘New Water
Architecture’, a conceptualisation of which is presented in
Figure 3. Within the framework, connectivity is enhanced and
interdependencies identified and sustainably exploited so as to
optimise the use of both primary resources, as well as the so-
called ‘wastes’ of system processes. The practice of identifying
interdependencies is also critical for minimising risk exposure
and propagation that may otherwise undermine a system. The
integration of water management is thereby improved on
the ground (physically), in governance (institutionally), and
within the consciousness of the public and decision makers
(conceptually).
3.1 Conceptual integration
Water has traditionally been viewed as a free resource, its
availability taken for granted and its use therefore susceptible
to exploitation. Even today, although domestic customers pay
a fee for their water services, the water commodity itself is
regarded as worthless. Bills reflect only the costs incurred by
the companies in getting water to the tap and in dealing with
generated waste water; its fundamental benefits to society are
ignored. This scenario means that water management takes
place from a platform which undervalues water and which
fails to appreciate its wider roles. Effective decision making is
therefore compromised.
The scarcity element of water is best communicated by its
attributed value, and in a modern, consumer society the
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appreciation of the true value of water is unlikely unless price
signals are felt. With appropriate pricing, alongside measures
that ensure affordability for the most vulnerable, economics
should ensure effective allocation of water between its
competing users. Decision makers will also be more capable
of developing policy optimised across resource sectors. With
this conceptual consensus in place, improvements to the
physical and regulatory frameworks can be made with
confidence.
3.2 Physical integration
‘New Water Architecture’ proposes a number of changes to the
physical characteristics of the water sector of England and
Wales. Implemented in unison, they improve system efficiency
and resilience, increasing our capability to achieve water, food
and energy security and thereby to promote economic growth
while also sustaining the environment. Its key concepts are as
follows.
3.2.1 High flow storage
Considering climate projections that indicate potential winter
increases and summer decreases in rainfall (see Murphy et al.,
2009), intuition would suggest the development of additional
storage capacity as a logical response. During winter, high
river flows that may otherwise pose downstream risk can be
sustainably captured, stored, and then used to meet demand
during dry periods when continued abstraction would otherwise
damage the interests of downstream users.
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Figure 2. Changes to seasonal mean precipitation (%) by the
2080s under the UKCP09 medium emissions scenario. Values of
change shown over each administrative region (Murphy et al., 2009.
Reproduced by kind permission of UKCIP)
Large storage reservoirs enable significant fractions of any long-
term supply–demand imbalance to be met. They are widely cited
by the water companies as essential to meet future demand. The
construction of large reservoirs remains publicly divisive
however and the number of planning approvals will be tightly
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controlled. An alternative is to increase the capacity of existing
facilities. As the associated infrastructure is already in place,
this approach would have a reduced environmental impact
and would enable significant extra capacity to be gained at
comparatively low cost (CIWEM, 2011a).
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Figure 3. ‘New Water Architecture’

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Aquifer storage and recovery (ASR) describes the process by which
water, raw or treated, is artificially pumped into aquifers for later
use. It relies upon the presence of a suitable aquifer-bearing rock
and so is not appropriate everywhere. Importantly however, the
water-scarce south-east does possess the requisite geology and
schemes already exist in the Lea Valley and in Enfield–Haringey.
Gale et al. (2002: p. 40) find that ‘ASR is a viable water manage-
ment technique [for the UK] that has the potential to resolve a
wide variety of supply issues in an environmentally sustainable
manner’. Although the pumping process is energy intensive, figures
presented by the Environment Agency (Table 2) indicate that ASR
has a lower carbon dioxide emissions cost than many other
options. The table also shows how other initiatives within
‘New Water Architecture’, as well as those that do not fit
within its framework but that are commonly considered by the
water companies, compare in terms of respective ‘carbon costs’.
Smaller-scale reservoirs are particularly well suited to meeting
agricultural and industrial water demands. Irrigated cropping
constitutes a relatively small but highly significant proportion
of UK agriculture; the industry is worth £3 billion to the
annual economy of eastern England alone (Weatherhead et al.,
2010). Although efficiencies in irrigation can be achieved, the
proliferation of small-scale storage facilitates provides a more
immediately robust means of addressing both water and food
security. Summer water supply is assured without environ-
mental degradation and cropping and product supply can be
planned with far greater certainty.
3.2.2 System-wide measures
Within ‘New Water Architecture’, high flow storage facilities
should be accompanied by system-wide initiatives that together
act to reinforce naturally occurring processes that slow down
water. As almost all water interacts with the landscape before
entering supply networks, it is logical that land management
should be given greater precedence in water governance. Well-
managed soils and the maintenance of vegetated buffer strips
act to slow the conveyance of water and to reduce soil erosion.
Water, soil and, importantly, nutrients are therefore more
readily retained on the land, enhancing yields, preventing
degradation of water quality and reducing downstream flooding
and pollution. Studies by Wessex Water (2011) found that
catchment management solved water quality problems at
one-sixth of the cost of the treatment alternative and with a
substantially reduced carbon dioxide footprint.
Sustainable drainage systems (SuDS) comprise a variety of
generally localised interventions that help to mitigate many
of the adverse effects of stormwater flow, principally by
mimicking the natural catchment response and thereby con-
trolling run-off at its source (CIRIA, 2007). In order to slow
water passage over seasonal time frames, preference should
be given to SuDS, such as permeable paving, that direct
surface water run-off into the ground. These interventions
replenish water sources, reduce flooding and limit the volume
of stormwater entering sewers and otherwise contributing to
treatment costs.
3.2.3 Improved infrastructure connectivity
The authors consider that the water resources of England and
Wales would be most effectively and sustainably exploited
through greater inter-regional transfer of raw and treated
water. The current lack of transfers reflects several factors
including those listed here.

Option Emissions: kgCO2e/day Carbon cost relative to Carbon cost:

per house baseline: pence/m3 pence/m3

Metering and tariffs 2.08
3 25

Current water ‘supply–use–disposal’ carbon cost 2.43 baseline 28
Direct groundwater abstraction 2.46 þ1 29
Aquifer storage and recovery 2.47 þ1 29
River intake 2.48 þ2 30
Indirect effluent reuse 2.57 þ3 31
Reservoir 2.61 þ3 31
Community rainwater harvesting (retrofit) 2.56 þ6 34
Desalinisation (brackish water) 2.91 þ6 34
Individual household rainwater harvesting (retrofit) 2.67 þ10 38
Community grey water reuse (retrofit) 2.59 þ11 39
Individual household grey water reuse (retrofit) 2.71 þ16 44
Desalinisation (saline water) 3.77 þ16 44
The life cycle impact assessment of options is based on estimated
emissions associated with construction, manufacture, installation,
maintenance and operation
Table 2. Emission life cycle assessment (Environment
Agency, 2008)

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(a) Statutory duties on water companies to meet demand in
their area and that hence encourage self-sufficiency.
(b) Classification of transfer payments as operating
expenditure which, as opposed to capital expenditure, do
not earn the companies a return.
(c) Concerns expressed by the environmental regulator
regarding the potential ecological impacts of transfers
between watercourses of differing quality.
Transferring supplies from the relatively wet west to the
comparatively dry east is however logical and may be vital if
future projections of high domestic and agricultural water
demand are realised. One way to improve the capacity and
efficiency of water transfer is to utilise (and enhance where
appropriate) the inland waterway network.
The 5000 km of navigable inland waterways in England and
Wales already provide over 1 million Ml of water annually for
irrigation, domestic use, industry and power generation
(Defra, 2011c). As waterways cross physical and administrative
boundaries and link regions of water surplus and deficit, their
further exploitation could allow transfers to become a viable
Figure 4. Strategic resource options considered within the 1994
NRA strategy. Contains Environment Agency information
# Environment Agency and database right
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means of overcoming regional supply imbalances. Carefully
targeted reservoirs could act as primary flow sources for new
networks of canals or existing canals with increased flow
capacities. Flows could also be augmented with treated storm-
water or effluents. A more extensive and interconnected storage
network also increases system resilience. The damaging impacts
of intense rainfall events would be lessened by reduced peak
flows while the effects of more prolonged rainfall could be
mitigated by advanced drawdown within infrastructure.
The idea of water transfers is not new but while past intra-
regional improvements in connectivity have occurred, progress
towards inter-regional linkage remains limited. As early as 1973,
the Water Resources Board highlighted the benefits of moving
water from wetter to drier regions and advocated transfers
between the Severn and Thames (Water Resources Board,
1973). A 1994 National Rivers Authority publication found
that transfer from the Severn to the Thames and Trent (poten-
tially utilising the Trent and Mersey, Coventry, and Oxford
canals) could constitute viable and significant elements of a
strategy for meeting a future high-demand scenario (Figure 4;
National Rivers Authority, 1994). A 2000 Defra report also
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concluded that the canal network offered potential for water
transfer and suggested that relatively little engineering would
be necessary (Defra, 2000). Significant environmental concerns
have also been highlighted however, particularly regarding
potential water quality impacts on the receiving watercourse.
Research on this issue must be a high priority, however there
appears scant evidence of either deleterious or benign environ-
mental effects.
In 2006, the Environment Agency concluded that there existed
no new evidence to support large-scale water transfers to the
south-east (Environment Agency, 2006). The report estimated
a cost of £2.4 million per Ml per day for developing and trans-
ferring water from Wales to London via the Severn compared to
an investment of £1.6 million (per Ml per day) needed to
develop the necessary reservoirs in the south-east. Interestingly,
the report does state that beyond 2030, and considering
expected climate change, large-scale transfer may prove necess-
ary. Subsequent studies around the Thames Water Resource
Management Plan have shown that the water transfers versus
reservoir economics are more finely balanced; however, there
exists much conjecture and debate on this issue.
Some progress towards increasing the frequency of transfers is
being made and modelling in particular is helping to demonstrate
the benefits. Regional water resource modelling for the Water
Resources in the South East (WRSE) group (WRSE, 2010) had
led, by 2005, to the implementation of four new water transfer
schemes between companies. By introducing new members to
the group, it is hoped that wider regional transfers can be
tested and promoted when selected as robust solutions.
3.2.4 Waste water as a resource
Traditional water management approaches consider the pro-
cesses between source and discharge as linear. However, as
pressures on water resources have increased, recognition of
their diversity has stimulated increased focus towards their
more efficient exploitation. Cyclical management streams are
required that change perception from one of ‘wastes’ to one
of ‘resources’. Applied across all resource sectors and con-
sidering the intrinsic links between them, this concept becomes
part of a wider system of synergies referred to as industrial
symbiosis. By co-locating industries with synergistic resource
requirements, improvements in efficiency and effectiveness are
enabled beyond those which could be achieved in isolation.
Supply chains in the Danish city of Kalundbourg enable
annual waste exchanges of 2.9 million tons and an overall
reduction in water consumption of 25% (Chertow, 2004). In
the UK, efforts are currently limited but purport successful
results (Mirata, 2004).
Within symbiotic networks, waste water reuse can play an
important role, both by increasing the resource and by reducing
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nutrient discharge (Durham et al., 2005). In this way, reuse acts
to draw together the traditionally discrete sectors of clean and
wastewater management (Figure 5). By reusing more waste-
water, pressures on traditional supplies can be reduced. Waste-
water is also a source of energy through release of methane
during digestion of sludge, of soil conditioner from dried
sludge, and of inert construction materials.
One of the least well appreciated aspects of the water sector is
that a notable proportion of supply has often already been
used. Although indirect reuse is commonly utilised to augment
domestic, industrial and agricultural supply, water scarcity is
now focusing attention towards more direct applications. This
already occurs within industry and agriculture; however,
examples of potable end use are extremely rare. In the
limited number of international examples (CIWEM, 2011b),
severe resource pressures have to some extent forced the hand
of decision makers and the public. Where crises are not yet
so acute, government guidelines and crucially public per-
ception must first change before schemes can be implemented
successfully.
The paradigm of developed nations defines wastewater
management as the final process of a linear service provision.
If however waste water is viewed as a potential source of
clean water, energy and materials, all of which have value,
then there is a case to view it as a separate business. ‘New
Water Architecture’ proposes that domestic waste water
becomes a resource for which business would compete to
acquire. The authors believe that the potential markets could
be substantial. Examples of innovative nutrient removal tech-
nologies could provide cost savings and revenue of US$1
million per year per treatment plant (Ostara, 2011).
3.3 Institutional integration
Crises of water management frequently reflect weaknesses in
governance that exacerbate water resource pressures, or at
least prevent their acceptable resolution. To effectively
implement the ‘New Water Architecture’ model, water policy
must be aligned across all resources so that both the public
and decision makers can make informed choices. Recent
research is beginning to echo this sentiment. The 2011 Foresight
report on food called on the sectors of water supply, energy and
ecosystem services to consider implications for food when set-
ting their policies (Foresight, 2011). This approach must be
mutual. Going so far as to develop a single ‘National Resource
Strategy’ could prove effective. As a minimum, a ‘National
Water Strategy’ must be understood and agreed by all.
Critical elements in an integrated network are the optimisation
of water sources and management of their dispersion through
the grid. To effectively steer this process, it is suggested that
public ownership of key water resources is increased through
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Figure 5. Applications of wastewater reuse (Durham et al., 2005).
Reproduced by kind permission of the WateReuse Association
the control of a ‘National Water Steward’. In order for the
‘New Water Architecture’ to succeed, a significant water
company collaboration is required and without some form of
independent control, the risks of unfair practice would be
high. Furthermore, by developing the water steward role, it
would be more straightforward to align operations with a
universally agreed strategy.
Although infrequently cited, the Environment Agency (2009a)
has already considered increasing its control over primary
water resources for exactly the reasons stated above. Ofwat
(2010b) also covers these issues in reports discussing the cre-
ation of water markets that it claims would provide savings of
£960 million over 30 years. Ofwat (2010b) recommends against
going so far as to establish a water steward and instead postu-
lates that discrete departments within the water companies
take on system management under strong regulation (Figure
6). Ofwat does concede however that the water steward
approach may be the only way to fully eliminate incentives
for discriminatory practice (Ofwat, 2010b).
In order to optimise water withdrawals from the network,
abstraction licensing also needs reform. Licences are currently
required for users wishing to abstract more than 20 m3 per
day, however 80% of licences are valid indefinitely (Environ-
ment Agency, 2009a). The calls for a more flexible system in
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which licences are time-limited and where the trading of licences
(or part-used allocations) is encouraged are now widespread.
Temporary water allocations in Australia’s Murray–Darling
basin have supported water trading that added AUS$220
million to GDP in 2008–09 and that notably reduced drought
impacts (Ofwat, 2010b). Licence charging must also change in
order to give water a value and in turn to demonstrate its scar-
city to users. The current price principally reflects the adminis-
trative costs to the Environment Agency of managing the
abstraction framework and results in the paradox whereby
charges may be lower in more water-scarce areas.
3.3.1 Finance
Although many of the initiatives discussed in this paper have
been assessed by the water companies to be those that achieve
the best returns on investment, it is acknowledged that their
implementation would require significant financing (for example,
see the costs of transferring water highlighted above). The water
industry currently spends around £8 billion a year on capital and
operating costs (Government Office for Science, 2011). In this
regard, capability should be enabled by the charging of a more
appropriate price for domestic and agricultural water use. In
2010/2011, the average household in England and Wales paid
less than £1 a day for its combined water supply and sewerage
provision. Given this small outlay (the average annual combined
gas and electricity bill is £1032 (Ofgem, 2011)), public response to
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Figure 6. Ofwat’s concept of a system operator managing flows
from source to customer (Ofwat, 2011b). Reproduced by kind
permission of Ofwat
demand initiatives will only be sub-optimal while the capability
for capital investment is also capped.
It is important to recognise that the various uses of domestic
water are not of equal importance. Whereas use for drinking
and personal hygiene is essential, other uses are not. It is
therefore illogical that for the 63% of properties in England
and Wales that are unmetered (Ofwat, 2009), a single annual
water fee is charged irrespective of the amount used. Chan-
ging to a tariff form based on volumetric usage would more
effectively communicate water’s scarcity and it is argued here
that increasing block tariffs represent an appropriate pricing
mechanism. Increasing block tariffs assign different prices for
discrete volumetric blocks of supply and therefore permit
differentiation between essential and discretionary use. Many
variations could be employed. For example, a cost recovery
tariff could be charged for the first block with subsequent
blocks assigned a price that reflects the intrinsic value of each
cubic metre of water. Recent trials of rising block tariffs by
several of the water companies failed to deliver conclusive
evidence of reductions in demand; however, Herrington (2007)
highlights examples in the US and Spain which point towards
significant reductions. Further research to optimise tariff
structures is clearly needed; however, increasing block tariffs
can provide a simple solution, present a clear message to
customers regarding consumption, and are adaptable in both
their price and quantity dimensions should circumstances
change (Herrington, 2007). To prevent a disproportionate
financial impact on large, low-income households, charges
should be based on volume used per person and therefore
data on household occupancy must improve. This limitation
‘New Water Architecture’: an integrated
water management model
Norton and Lane
could be overcome by an initial assumption of low household
occupancy subject to change following receipt of evidence
from the homeowner.
3.3.2 Governance
The Coalition Government’s cornerstones of Localism and Big
Society promote concepts that align closely with the character-
istics of ‘New Water Architecture’. By taking a greater interest
in their local catchments, the public would become more aware
of the complexities of water use. In turn, community support (in
principle or through donation of time and finance) may be
accessible. Equally however, public support for local catchment
initiatives and for an appreciation of the true value of water will
be hard to secure; they should be fostered through careful public
communication from an appropriate level of authority. The
need to maintain some level of government control is crucial.
Lack of clear leadership is often cited as a cause for the failure
of Integrated Water Management (Wilby and Vaughan, 2011)
and without it the application of coherent water policy across
resource sectors may prove elusive.
4. Conclusions
This paper has presented an alternative model for the manage-
ment of water in England and Wales. ‘New Water Architecture’
is founded on recognition both of the synergies between differ-
ent water users, and of the fundamental dependencies between
water, food, energy and biodiversity. To best manage these
relationships, a systems-based approach should be adopted
within which individual initiatives that include high flow
storage, ASR, SuDS and cyclical resource use, are implemented
in unison.
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The current physical and regulatory framework is link-constrained
and this is one of its greatest limitations. To overcome it, ‘New
Water Architecture’ proposes improved integration in two ways:
via regulatory change that promotes independent public control
over key water sources to guide operational practice; and through
an increased number of physical sources and interconnections,
achieved for example, by enhancing the inland waterway network.
The model opens up dependable new water sources and crucially
builds overall system resilience to a range of pressures that are
predicted to become increasingly acute. The exact nature of
those pressures is however uncertain and so by providing benefits
throughout the system, in multiple forms and crucially, to a variety
of resources, ‘New Water Architecture’ represents a low-regret
alternative to the current framework.
However, before appropriate and objectively assessed regu-
latory and physical infrastructure improvements can be
implemented, decision makers and society must first fully
appreciate the fundamental roles played by water in all facets
of societal, economic and ecosystem health. In order to reveal
its scarcity, the true value of water must be established through
the accurate pricing of supply in contrast to the current scenario
of bills reflecting only the costs of delivering and treating water.
Recognition that domestic water use is both essential and
discretionary will permit innovative tariffs that incentivise
reductions in consumption. Recognition of the role played by
water in growing and processing food (both domestically and
abroad) will permit policy makers to make reasoned decisions
around agricultural water needs. Recognition of the resource
value of waste water will open up innovative institutional and
market models. Appropriate price models for all uses and re-
uses of water will provide the necessary investment funds for
integrated infrastructure improvements.
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