1. As the body responsible for managing and planning water resources in England and Wales, the Environment Agency is developing new water resources strategies at both national and regional level. These strategies are in response to the Government’s report "Water Resources and Supply: Agenda for Action".
2. In early November 1999, the Environment Agency published a national document "Sustainable Water Resources for the Future — Values and Challenges. This was not a draft strategy but did seek opinion on many important issues, questions and principles that need to be considered both in national and regional water resource strategies.
3. Many of the issues, questions and principles raised in this national consultation document are important to the Southern Region of the Agency, which has produced a regional consultation document to focus more clearly on local issues. Comments are requested by 15^th July, with the Strategy due for publication in December 2000.
4. The purpose of this report is to advise Members of the contents and implications of the document and to recommend a response to be submitted, following discussion by the Members, to the Southern Region of the Environment Agency.

2. Aims and Objectives of the Water Resources Strategy

1. The aim of the new national and regional water resources strategies is to protect the long-term future of the water environment over the next 25 years while supporting sustainable social and economic development. Within the Southern Region Strategy it is hoped to integrate the following water resources management objectives:

• Make the best use of existing resources;
• Achieve the current National Environment Programme and consider future environmental objectives;
• Establish realistic aims for further leakage control and water efficiency measures;
• Consider future uncertainties and risks, such as climate change;
• Foster relationships with planners and developers to minimise the adverse impacts of socio-economic development; exploring future possible development scenarios to provide a sound basis for clear guidance to planners and developers;
• Provide a framework to which future detailed work can be added, such as the Catchment Abstraction Management Strategies; and
• Manage water resources within the statutory duties placed upon the Agency.

2. Developments in Water Resources Planning and Management

1. Since 1990 the total volume of licensed water abstracted in the Southern Region has increased by around 15%. In 1997/98 just over 508,000 million litres per annum (Ml/a) for public water, compared with just 80,000 Ml/a for industrial and agricultural uses. Over the last three years significant progress has been made in treated water transfer and sharing of resources between neighbouring water companies so that surpluses can be used to meet supply/demand shortfalls elsewhere.
2. The total regional leakage level is set to be around 190 Ml/day in 2000/01, down by one-third from the 1992/93 level of 281 Ml/day. This saving of some 90 Ml/day would be the approximate equivalent to 2-3 times the average daily supply for Brighton and Hove. In fact, since 1993/94, leakage has been reduced by 72 Ml/day to a current level of 197 Ml/day.
3. In April 1999 the water companies submitted their Water Resources Plans (WRPs) to the Agency setting out their proposals for meeting predicted demands over the next 25 years. The preparation of these Plans is the first time that all the companies have planned future resources to standard guidance and criteria. The WRPs for the Southern Region highlight the uneven distribution of water resources across the Region; some companies have demonstrated difficulties in maintaining a supply/demand balance for some resource zones in the short and medium term.
4. More than 70% of the regional abstraction of water is from groundwater. Groundwater protection zone definitions have now been completed for all the main aquifers across the Region.
5. As part of the 1999 Periodic Review of water company charges the Environment Agency advised the Government on the programme of environmental improvements that needed to be investigated by water companies in England and Wales to comply with European Directives and UK legislation. The programmes of environmental investigation and improvement for 2000 — 2005 is known as the National Environment Programme (NEP). The only NEP site associated with abstraction problems within the AONB is Swanbourne Lake at Arundel (an SSSI). Investigations into the impacts of water company abstractions for NEP sites is to be undertaken by 2004.
6. The UK Conservation (Natural Habitats) Regulations 1994 (following from the European Habitats Directive) require the Environment Agency to review all existing abstraction licences and discharge consents to identify those affecting the integrity of Special Protection Areas (SPAs) for birds and Special Areas of Conservation (SACs) for all other types of animal, plant and habitat. A number of SPAs and candidate SACs have been provisionally identified by the Environment Agency and English Nature as sites where existing licences and consents are likely to be causing adverse effects. A much larger number have been deemed as requiring further investigation to clarify whether adverse effects are present. The Agency is required to modify or revoke damaging licences and consents considered to be having a detrimental effect on a European wildlife site.
7. Following the drought of the mid-1990s and increasing public awareness that some licensed abstractions are contributing to environmental damage, the Government announced a review of the abstraction licensing system and consulted in 1998. The Government’s decisions were published in March 1999 and will result in major changes to the licensing legislation.
8. More than 40 proposals were set out in the Government’s decision paper, the most significant (in summary) being:

• Local Catchment Abstraction Management Strategies (CAMS) will be developed;
• New licences will be time-limited and most existing licences should be converted, over time, to time-limited status;
• Some major purposes for abstracting water, including those for trickle irrigation, de-watering and navigation will be brought into the licensing system for the first time;
• The Agency will continue to see voluntary action by licence holders whoes abstractions are shown to be causing environmental damage, but the Agency will use its existing powers to alter or revoke licences where no agreement can be reached.

1. Since 1996 the Agency has produced Local Environment Agency Plans (LEAPs) which detail the current state of the environment and describe a range of issues that influences the environment, economy and social well-being of the area. CAMS are seen as complementing LEAPs by describing the water resources position and setting out a strategy to deal with the pressures on water resources in each catchment. The Environment Agency is currently consulting nationally on its proposals for the CAMS process. The Agency believes that the Regional Water Strategy will provide a framework for the development of CAMS, will increase understanding and provide detailed information for future strategic development.
2. The European Community published the Water Framework Directive in 1997. This has yet to be adopted in the UK, but would require prescribed ecological and quality standards for surface water and groundwater sources, through the implementation of a system of analysis and planning called River Basin Management Planning. The Agency considers that this approach accords closely with its own proposed CAMS.
3. Attached to this report as Appendix 1 is a table copied from the consultation document which summarises the water companies’ proposals at county level showing the proposed increase in available water resources over the next 25 years derived from new resource development and demand management options.

1. The core objective of the water resources strategy is the protection and enhancement of the water environment — which is seen as both a driver and a constraint. The Agency has a duty to manage water resources to maintain a proper balance between meeting the needs of existing and potential water users and protecting the environment, to be achieved through the determination and issue of abstraction and impounding licences. In this determination, the Agency is to make checks to ensure that the amount of water being sought for abstraction is reasonable and sustainable, ie there would be no long-term systematic deterioration in the water environment. Over the last ten years the Southern Region of the Agency has followed two other policies to protect the environment when determining abstraction licences:

• A presumption against further consumptive abstraction from most of the chalk aquifers of the Region (and some of the lower greensand aquifers);
• A presumption against further summer consumptive abstraction for most surface water catchments, with potential abstractors being encouraged to apply to take water in the winter and provide reservoir storage from which they can use water freely in the summer.

1. Many abstraction licences were issued as licences of right or entitlement following the 1963 Water Resources Act. This has led to the current situation where large areas of the Region re over-licensed. In 1997/98 only 45% of the licensed consumptive extraction was actually taken — if the full licensed abstraction quota was taken then the environment, according to the Agency, could not be sustained.
2. The Agency recognises the need to ascertain the quantity of water required to sustain the needs of the environment. Depending on where this quantity lies relative to the total licensed quantity and actual abstraction rate, it could mean that there are sufficient resources to allow further licensing (which would be inconsistent with the Agency’s view noted above), or that if total licensed abstraction occurred it would cause a problem or that the current rate of abstraction is too high, giving rise to the need to reduce that licensed quantity or rate.
3. Recovery of abstraction volumes will normally involve finding a replacement resource or achieving demand savings. Swanbourne Lake is an example where alternative approaches to maintaining public water supplies are being implemented to reduce the impact of abstraction on the environment.
4. The Agency believes that much of the Region requires recovery of "paper" licensing (ie authorised, but not taken, abstraction) and that key sites are likely to require the recovery of actual abstraction. The Region’s aquifer sustainability categorisation, published in 1998, shows that all the aquifers are at the limit of sustainability or give rise to sustainability concerns (the aquifers within the Sussex Downs are shown as being at the limit, but the upper reaches of the Rivers Itchen and Meon in the East Hampshire AONB are giving rise to concern).
5. The difficulty of establishing a firm water resource balance and demand forecast for the Region is further complicated by a number of issues, including SEEDA’s regional development strategy, draft regional planning guidance and climate change. Although SEEDA recognises that one of the most acute environmental pressures in the Region is the high and increasing demand on water resources, it wishes to maintain a healthy economy in the Region as a whole.
6. The Water Resources Plans of the water companies indicate that at the present time water resource zones in parts of Sussex and Kent have water resource deficits and depend on bulk supply transfer from neighbouring areas to meet local demand. South East Water, Kent and Sussex region identifies immediate and short-term (until 2005) deficits in water resources. It also projects water resource deficits beyond 2005-2015, particularly in Mid Sussex. Southern Water also identifies immediate and short-term water resource deficits, particularly in Sussex north, but also in Sussex East.
7. The predictions of water supply in the WRPs are based on the current adopted regional planning guidance figures and do not, therefore, take account of the additional 85,000 new households to 2016 now proposed by the Government. These additional households could amount to an additional regional water demand of some 35 Ml/day, over and above that forecast by the water companies, equivalent to that of an urban area such as Brighton and Hove.
8. Climate change predictions appear, according to the Environment Agency, to be reaching a consensus that has implications for water resources management across the Southern Region. Winter rainfall is likely to increase, whilst summer rainfall is likely to decrease. There is also likely to be an increase in summer temperatures and a rise in sea levels. This general trend may mask the impact of more severe variability in climate, with more frequent and violent storms and more severe droughts.
9. However, the actual implications of these generally agreed predictions for water resources management are as yet unclear. The only thoughts from the Environment Agency on these implications are that increased winter rainfall may or may not benefit groundwater recharge, warmer and drier summers will almost certainly lead to increased demand for water, and higher temperatures and lower river flows will place more stress on the natural water environment.
10. Appendices 2 and 3 contain two more tables copied from the consultation document. The first of these illustrates three scenarios for the potential recovery of licensed and actual abstraction which could occur over the next 25 years. The second illustrates the increased demand by county that would be required by the Government’s proposed housing figures.

5. Options for Securing Adequate Resources and Environmental Protection

1. In considering options for meeting future demand the Agency recognises that securing adequate resources for reasonable needs and protecting and enhancing the environment may be conflicting objectives. The Agency is therefore suggesting that its Regional Strategy should focus on those options with the greatest potential to achieve both of those aims eg:

• enhancements of the existing supply base: removal of engineering constraints to allow increase source outputs or conjunctive-use opportunities;

• leakage control: only one water company in the Region plans to achieve a level of leakage that is significantly lower than the current mandatory target set by OFWAT. Four of the companies maintain that this target is below their economic level ie the cost of reducing leakage is greater than obtaining water from other sources. However, the Agency believes that there is still scope for savings to be made;

• demand management: water-saving devices in the home, workplace, public facilities, gardens and parks. The water companies generally remain sceptical or cautious about the long-term impact of such measures and they have projected little savings through these in their current demand forecasts;

• effluent re-use: a significant quantity of water abstracted from streams and rivers in upper catchment areas of the Region is supplied to coastal areas and then discharged directly out to sea as treated effluent. With recent and future improvements in the standards of treatment the return of suitable coastal discharges inland could provide a very significant resource volume, albeit at a cost. Indirect effluent re-use, where treated effluent is discharged to a watercourse and then abstracted at a treatment works further downstream, already occurs extensively in the Southern Region and are not, therefore, a new resource;
• reservoirs: Water company WRPs include consideration of the options to enlarge existing impounding reservoirs at Bewl, Darwell and Ardingly. Current water company plans assume that one new reservoir will be needed in East Sussex by 2025, with the Lower Ouse (Clay Hill or Bevern Stream catchments) or Upper Cuckmere (Hale Green) as possible sites. Other potential new reservoir sites include Havant Thickett in Hampshire, Chillerton on the Isle of Wight and Broad Oak in Kent;

• winter storage: abstraction and storage in winter for use in the summer is favoured, but perhaps limited by the willingness and freedom to construct storage reservoirs;

• innovative solutions: Water company WRPs consider aquifer storage and recovery (overall potential not great due to the nature of the aquifers in the Region), effluent re-use (as above) and desalination, but not grey water recycling;

• Distribution and sharing of resources: the Region’s resources are not evenly distributed geographically or matched against the geographic demands for water. The principle of sharing water resources from areas of surplus to areas of deficit has been central to the regional strategy since 1994, but there is scope for the Region’s water resources and supply systems to become even more integrated.

1. The consultation document identifies other issues to be considered:

• cross-catchment transfer of treated water is preferable to minimise concerns about the transfer of aquatic flora and fauna;
• cross-catchment transfers for supply purposes mean that resulting effluent discharges are unlikely to find their way back to support the donating catchment;
• transferred water may need additional treatment to maintain drinking water standards;
• integrated water supply systems can involve hidden environmental costs due to energy or chemical usage;
• the economy of scale of strategic resources developments need to be considered against the alternative arguments for local resources for local supplies.

6. The Future Supply/Demand Balance

1. Section 4 of this report considered the key issues facing the Southern Region and Section 5 examines the main options for securing adequate resources and environmental protection. Whilst the water companies have identified options for meeting demands forecast within their WRPs, as shown in the table attached as Appendix 1 to this report, these plans do not consider the impact of the environmental initiatives being required by European Directives or national legislation, or the additional housing provision proposed by the Government.
2. Additional resources or demand management over and above the measures currently planned by the water companies may therefore be required to allow for the growth in demand resulting from increase housing development and the reduction in existing resources which could result from reviews of abstraction impacts. Appendix 4 is a reproduction of a table from the consultation document which shows the potentially serious problems that the Southern Region may be facing.

7. Ongoing Studies

1. The Environment Agency in the Southern Region is presently undertaking a number of projects to expand its knowledge and address the challenges ahead. Of particular interest to the Board are the studies of the River Ouse and the River Rother. Both studies include programmes of biological monitoring in the catchments with that for the Rother including fish-tracking.
2. Work has also started on reviewing the abstraction licences that may be harming the local environment of the River Itchen, which rises in the East Hampshire AONB and is a SSSI and candidate SAC along its entire length.
8. Assessment

1. The consultation document contains some welcome and heartening information, particularly the increased co-operation between the water companies and the increased attention to the environment. However, there is a very serious message in the document.
2. The additional demand that would result from the Government’s increased housing figures alone is greater than the indicative potential savings from further leakage control and water efficiency measures. As this additional demand can be seen as corroborating the contention that the increased housing numbers will exceed the environmental capacity of the South East, it is essential that every opportunity to build in water conservation measures such as sustainable urban drainage systems and grey water recycling systems in new housing development is taken. The Agency should require such measures as part of new housing developments.
3. However, even if these measures are undertaken, with the requirement to meet European Directives and UK legislation on protecting habitats there will still be a considerable shortfall in supply compared to demand. There will be a need, therefore, for more drastic measures in order to allow the Agency in the Southern Region to meet its aim of protecting the long term future of the water environment over the next 25 years whilst supporting sustainable social and economic development. These are likely to include some or all of the other options identified in Section 5.
4. As predicted, it would seem unlikely that many of these measures would have significant impacts on the Sussex (or South) Downs — indeed, the two AONBs are much more likely to benefit from the increased emphasis on the needs of the environment. However, whilst none of the potential sites for new reservoirs are actually within the Downs, the possible construction of reservoirs on the Lower Ouse or Upper Cuckmere, both just to the north of the AONB, may have implications for river flow downstream.
5. In addition, the increased emphasis on winter storage may well lead to proposals for smaller reservoirs for agricultural purposes. In fact, there is a current application for the construction of a 55 million gallon reservoir on a site near the River Rother, just to the south of Tillington, near Petworth, to be filled during the winter and used for summer irrigation. The ecological benefits of increased flows or groundwater resources has to be balanced against the visual and other impacts of the construction of impounding reservoirs.
6. Whilst the benefits are more widespread and potentially less obvious, the impacts of the reservoirs are likely to be localised and very apparent. It will be important not to lose sight of the bigger picture whilst at the same time defending the AONB against development which detracts from its visual (and/or ecological) quality. Certainly reservoirs which meet a strategic need and which could, therefore, be sited outside the AONB should generally be resisted, unless they can be satisfactorily integrated into the landscape and have wildlife and/or recreational value, but those which are required to meet a specific local need, such as that at Tillington, need to be considered more on a case-by-case basis.
7. There is also a case for the undertaking of a study by the Agency on the effects of (over-) abstraction from the chalk aquifers. The Agency could also examine the effect of market forces in terms of pricing as a means of demand management.
9. Conclusion

1. There can be no doubt that the way that water is currently supplied and managed is going to have to change in the near future if the supply-demand system and the environment are to be sustained. The increased emphasis on the protection and enhancement of the environment is to be welcomed, particularly through the options suggested to reduce the current levels of water abstraction that would not appear to impact directly or significantly on the AONB.
2. As part of these the Agency should be encouraging every possible means to reduce consumption, particularly through water conservation measures incorporated into new housing developments - an approach that does not appear to be promoted within the document. Other than this apparent omission, the only real cause for concern amongst these options is the potential requirement for the construction of reservoirs to meet local (agricultural) needs in the AONB.
3. The Agency is seeking comments on the issues raised in the document, specifically on the key issues for the Southern Region as set out in section 4 of this report, the suitability of the options to secure future water supplies and to sustain the environment within the Southern Region as set out in section 5 and the outline principles for the new strategy, as reproduced in Appendix 5. Appendix 6 contains recommended comments to be submitted following discussion and amendment or agreement at the Board meeting to the Environment Agency.
4. It may be appropriate to invite a representative of the Agency to address a future meeting of the Board, perhaps the January 2001 meeting following the publication of the Regional Strategy