PROVISION OF BASIC UTILITIES IN RURAL ENGLAND
Report No DWI0632

May 1989

Executive Summary

  1. This report presents findings of a study into the extent, location and consequences for rural areas of non-supply from the mains of the basic utility services of electricity, water and sewerage.

  2. Enquiries covered the whole of rural England. Four case study locations were selected for more detailed investigation in North Norfolk, South Devon, parts of Shropshire and North Yorkshire.

  3. All English electricity and water utilities and all English rural Counties and Districts were approached for information on the scale of non-supply in their areas, and for any details that they had of problems arising from non-supply. Accurate and detailed information is nowhere available, but from replies received and from the evidence of the case studies the following estimates of non-supply in England have been made:

  4. The principal explanation for non-mains supply to existing households and businesses of electricity and water is the high cost of first-time connection to isolated areas. Under existing legislation, water and electricity consumers may requisition the utilities to provide a supply, but there are charges for these connections.

  5. As regards the non-connection to mains sewerage and drainage, there are, in addition to problems arising from isolation, capacity constraints in treatment works. These have arisen from historical under investment by the utilities, rural re-population and diversion of resources by Water Authorities to meet increasing standards of service provision for existing consumers. These constraints have inhibited Water Authorities from agreeing to make connections for new developments unless the developers make a substantial financial contribution to the Authority. These capacity constraints at treatment works are scattered geographically and are not restricted to isolated areas.

    Issues

  6. Costs faced by potential consumers and developers for first-time supply are usually prohibitive. For water and sewerage, the charges often appear to be arbitrary and unrelated to actual costs incurred by the utility in any specified case.

  7. The costs of alternative supplies for electricity and water are invariably higher than most urban and rural consumers are charged for mains supply. There are, in addition, several inconvenience factors e.g. the need for regular petrol or diesel deliveries and the noise and inconvenience of local electricity generation, and the variability of water flows from shallow boreholes and streams. Alternative solutions to mains sewerage such as cess pits, septic tanks and small scale package sewerage schemes often are cost-effective. In certain localities physical conditions such as high water tables preclude the use of soakaways making local sewerage alternatives very expensive to install and operate.

  8. Alternative supplies of water from boreholes can usually be made safe for drinking and meet the directives of the EEC with comparatively modest amounts of treatment. Other private water supplies are more likely to require substantial treatment to meet directives particularly if they involve surface run-offs. Apart from the problems associated with meeting directives, alternative water supplies suffer from discolouration.

  9. The consequences of non-mains supply may be divided into two basic types of issue:

    1. Rural deprivation, where non-mains supplies are just one of a number of factors which contribute to the comparatively low standards of living of existing rural dwellers in isolated area.

    2. Limitation on economic development arising from non supply in the remote rural areas.

  10. Rural deprivation issues centre on the non-availability of mains electricity and water, since these are the services to existing domestic consumers for which alternative supplies can sometimes be costly and in the case of water, fail to meet direct ives. The failure to meet water directives is a matter of public health.

  11. The Consultants encountered only rare cases of economic development being frustrated by non-mains supply of electricity and water. Economic development is certainly frustrated by the non-availability of 3-phase electricity since this is necessary for the running of electric motors and is normally costly to install. Unfortunately, absence of information about 3-phase makes estimation of the extent to which economic development is frustrated on this account very difficult.

  12. By far the most important adverse influence on rural economic development arising from non-mains supply is the absence of treatment capacity for sewerage. Many frustrated developments are for housing but the Consultants did find wide-spread evidence that industrial development was being frustrated by high charges quoted by the Water Authorities for developers' contributions.

  13. Moreover, the scale of these contributions is often revealed only at the final stages of the planning process after much preparatory work for new development has been done. Developments have been frustrated by the size of these contributions. There is scope for better co-ordination of Planning activities in rural areas involving the Water Authorities and more accurate estimating of the actual costs by Water Authorities of increasing capacity for sewerage.

  14. Existing policy recognises the difficulties of the rural areas with respect to non-supply of basic utilities from the mains. Water Acts enable local authorities with Central Government help to grant aid connections. The scale of resources available for this programme of works is inadequate relative to the scale of the tasks. The Rural Development Commission also has its own programme of grant assistance to rural projects covering redundant buildings and site servicing. This programme can be fine-tuned on a case-by-case basis to meet the varying needs of rural areas. The Consultants recommend a focus on the provision of mains electricity and water, including 3-phase electricity given that the scale of the problems for sewerage is so great. A new source of funding to overcome sewerage problems of restraint seems to be required on economic development grounds.

  15. Privatisation of the electricity and water industries is currently underway with both Bills at Committee Stage in Parliamentary proceedings. The approach which will be adopted by Parliament to first time supply provisions of the privatised utilities remains uncertain but the following conclusions may be drawn at this time:

    Electricity Privatisation:

    The Bill puts the onus for controlling the privatised industry firmly on the regulatory body to set limits to the overall level and also to assess the structure of charges. It is unlikely that under privatisation there will be extra provision of resources to overcome the high costs of connection for isolated areas, or provide three-phase supply.

    Water Privatisation:

    The Bill provides for certain costs to be recovered from occupiers of properties for supplying new mains and connections to existing mains and for a right of appeal to an independent technical expert if there is disagreement over those costs. This right of appeal is valuable and an improvement over the present position, but in general the legislation is designed to confirm rather than improve on the status quo which is not to the advantage of the rural areas. The Bill provides no basis for assuming that Government will recognise the need for additional resources for sewerage and drainage for economic development.

  16. Within a context of no significant increase in resources the Rural Development Commission may have wished to see improvements to the status quo for first time supply particularly for water and sewerage. There are four possible options:

    1. to go for a standard charge as in telecommunications. This would remove uncertainty and put everyone on the same footing. However, the Government is unlikely, as in electricity, to support the general position that new users should not bear the burden of higher costs if costs are in fact higher. Indeed, the Government has already rejected the suggestion that charges should be standardised for that reason. However, there is scope for pressing for standard charges within defined areas or for requiring the companies to set out in advance what average contributions are going to be;

    2. to get nearer to the OFGAS model, and involve the Director General in the process of determining what is reasonable. That would allow a "case-law" to be developed and general principles promulgated. The DG could be advised by independent technical assessors;

    3. to endeavour to ensure that the new companies may charge only a limited range of costs, such as the direct costs of connection or supply, excluding basic infrastructure such as reservoirs or treatment works;

    4. to scrap the existing clauses in the Water Bill entirely and go for the drafting used in the Electricity Bill. That would leave the onus on the Director General.

    The prospects of making amendments to the proposed legislation are not now great, however.

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