Time limiting abstraction licences

24 November 2009

The government and Environment Agency would prefer to move to a position where all water abstraction licences are time limited, which allows for flexibility in regulation and the attachment of environmental conditions (in effect restrictions on use) where necessary to protect the environment.

A further consultation exercise in summer 2009 may yet result in more legislation (if the next government shares the same priorities) to address continued over abstraction and environmental damage.

The real issues around water abstraction are that pressures on the environment are increasing through climate change and pressures of new house building and development. The stock of existing water abstraction licences is still mainly unconditional, but subjecting them to time limits and environmental conditions may imply funding compensation which government has found to be intractable and difficult.

The water industry has won itself an exemption from the compensation scheme which it wishes to defend. At the same time as pursuing environmental protection by limiting over abstraction, the government also wants to promote competition and innovation in water supply markets as advocated in the Cave review. The result appears to be a temporary hiatus in water policy in government.