The DWMP blog – 31. Bistromathics and encouraging SuDS retrofit

Fans of Douglas Adams’ Hitchhikers Guide to the Galaxy will be familiar with the concepts of Bistromathics, which were set out in Chapter 7 of “Life, the Universe and Everything”, the third of the four books in the trilogy.?A key part of the theory is the extreme improbability of being able to correctly allocate the different parts of a bill to those who should be responsible for paying it.

But what has this got to do with DWMPs and SuDS retrofit?

Ofwat recently published its final requirements for the submissions for the PR24 five yearly review of water company business plans (https://www.ofwat.gov.uk/regulated-companies/price-review/2024-price-review/final-methodology/ ).?I so much wanted to find things that I disagreed with in this so that I could have a good rant on the blog.?But actually, it is pretty good (apart from the performance measure on sewer collapses, which might be the subject of a future blog).?One significant clause in the guidance is that the amount that can be reclaimed from customers for the wastewater service is a total amount rather than an amount per customer.?So, if for some reason the total amount recovered is reduced then the charge per customer can be increased to make up the shortfall.?One way in which the amount could be reduced would be if lots of customers implemented SuDS features for their property drainage and so could claim the rebate for not discharging surface water to the public sewers.?So persuading customers to stop discharging surface water is a win-win for the water companies.?Their costs for pumping and treating the surface water are reduced but they can still recover the same total income for the next 5 years.

So, the bigger the rebate for not discharging surface water the better all round.?But what are the rules on how big it can be??They are set out in the Ofwat “Charges Scheme Rules” https://www.ofwat.gov.uk/publication/charges-scheme-rules/ .?The key paragraph is:

20. Sewerage undertakers’ charges schemes must provide for a cost reflective reduction in the charges payable for the provision of sewerage services to any premises where the sewerage undertaker knows, or should reasonably have known, that surface water does not drain to a public sewer from those premises.

The key point is that the charge made or not made for surface water drainage should be reflective of the costs of draining that surface water.?The costs vary from company to company so the figures quoted for the rest of this blog are “typical”.?

The surface water charge is generally split into two parts.?One paid by all households to cover the cost of draining surface water from roads and other public areas.?This is typically ￡15.?In an ideal world this would be charged back to the local authority and recovered by them through the household rates.?This would then put some pressure on the local authorities to reduce the amount of surface water discharged.?However, in our imperfect world the best that the water companies can do is to embarrass the local authorities into action by explicitly stating that this is a charge to support them.

The remainder of the charge (typically ￡25) is paid by households who cannot demonstrate that they do not discharge any surface water to public sewers. It is generally a binary test; you pay all of it or you pay none of it.?This contradicts the second key paragraph of the Ofwat guidance:

21. Sewerage undertakers must set out in their charges schemes how any reduction in the charges payable for the provision of sewerage services to any premises will be calculated if customers can demonstrate that they have significantly reduced the volume of surface water draining to a public sewer from their premises or explain why there is no such provision.

The explanation given by the companies to justify not implementing this, is that it would be administratively too expensive to implement.?So there is little imperative to reduce surface water.

At least one company doesn't give a rebate if the property is served by a surface water sewer.?Indicating that they think there is no benefit in reducing discharge to surface water sewers.?There is some woolly thinking here in assuming that surface water sewers never cause flooding and that local surface water sewers never discharge into combined sewers further downstream.?Nevertheless, it sets the precedent that there can be different charging schemes for customers discharging to surface water sewers and combined sewers.

But still you ask, what has this to do with DWMPs and encouraging SuDS retrofit?

Well, the cost of draining surface water is not just the cost of pumping and treatment but also the massive investment required to upgrade sewerage systems to cope with increased development and climate change and in particular to reduce the operation of storm overflows.?The DWMPs have provided estimates of the extra cost for this as typically ￡100 for every household.?Overflow spill is caused by draining surface water to combined sewers, so what is the cost reflective distribution of this.

Let us assume that ￡40 of this extra cost is for draining highways and public spaces and should be paid by all households.?The remaining cost should be paid by those households that discharge surface water to combined sewers. ?This is typically half of households, so the extra charge would be ￡120 per discharging household.?So, the total potential rebate for not discharging surface water to a combined sewer would be about ￡145.?That is a significant saving and is likely to incentivise householders to act.?It is also sufficient for householders to push for a partial rebate for any measures they take to reduce their discharge.?So companies will have to come up with an efficient means of estimating a cost reflective rebate in these situations.?

And of course, as the revenue is set as total rather than per household, the more people deserve a rebate, the higher the charge for those who don’t.?It is a virtuous ratchet.

The new system is unlikely to be fair to everyone, but then again, the existing system isn’t either.?That is the way that Bistromathics works.?Everyone always ends up contributing to someone’s expensive smoked salmon starter or tiramisu dessert.?

Of course, as I set out in Episode 30, in a future utopia I would like to see those distinct charges for no discharge, discharge to surface water sewer and discharge to combined sewer standardised across the country.?But in our current imperfect world I will accept them being set regionally.