From Water Security to Water Value
Why the next fifty years of UK water policy should focus on what water achieves, not just how much of it we have
In 1976, a drought reshaped fifty years of British water policy. The goal that emerged from it was simple and, in hindsight, largely achieved: make sure the country never runs that short again. Improved network management and drought planning got more sophisticated. Today's water system is considerably more resilient than it was half a century ago.
But the problem has changed shape, and our policy thinking hasn't caught up.
The Environment Agency now projects a shortfall in public water supply of five billion litres a day by 2055 without further action and more than 60 per cent of that gap will need to be closed through demand management and leakage reduction, not new supply. Flash droughts, tightening environmental limits, population growth and rising infrastructure costs are all converging on the same conclusion: resilience is no longer just a question of how much water we have. It's a question of what we do with it.
Current policy hasn't absorbed that shift. We still talk almost entirely in terms of volumes, whether that be reservoir capacity, abstraction licences, leakage percentages, supply-demand balances. Useful numbers, all of them. But they tell us almost nothing about what a litre of water actually achieves once it enters the system.
And that varies enormously. Ask a supermarket and data centre what a hosepipe ban or drought restrictions means to their business, and you'll get two very different answers. One can be in genuine trouble within days of a restriction, the other is comparatively insulated. A litre reused during a summer drought in a stressed catchment is doing far more work than a litre saved during a wet winter somewhere with plenty to spare. Current policy treats these litres as identical.
A new organising principle
I've been arguing, in a discussion paper written for Defra, that the next phase of water policy needs a different organising idea: Water Value. Not how much water do we have or how little can we use, but how much value (economic, social and environmental) are we creating from every litre we abstract, treat and consume.
That's not just a rhetorical shift. It points to three practical building blocks. First, a proper way of measuring resilience itself. A Water Resilience Accounting Framework that scores the reuse, behavioural change and local investment that current metrics miss entirely, similar to the way carbon accounting scores emissions. Second, making that performance visible through Water Performance Certification, doing for water roughly what EPCs did for energy, so households, businesses and investors can actually see and compare it. And eventually, once measurement is solid, a mechanism for rewarding verified local resilience gains by introducing Catchment Water Credits, deliberately not a national trading scheme, but a way of directing investment toward whatever creates the most resilience per pound in a given catchment.
That last point matters because water, unlike carbon, is stubbornly local. A cubic metre reused in Sussex helps Sussex. It does nothing for East Anglia. Which is exactly why this connects so directly to abstraction reform: the Environment Agency is already working catchment by catchment to bring unsustainable abstraction licences back within environmental limits. What that process doesn't yet do is identify or reward the actions that close the resulting resilience gap most efficiently. A Water Value Framework would turn abstraction reform from a constraint imposed on licence holders into an investable opportunity for the wider catchment.
Why now?
None of this is abstract policy musing. The government has already committed to abolishing Ofwat and creating a single unified water regulator through a Water Reform Bill expected later this year. That's a genuine once in a generation chance to build a different objective into the system from the start.
If the last fifty years of British water policy were about securing supply, the next fifty could be about the value we create from every drop we've got.
The Full discussion paper, ‘From Water Security to Water Value’ is available on request.