This work is part of the Agency's Restoring Sustainable Abstraction (RSA) programme. The cost of compensation attributable to the full RSA programme is estimated at approximately £450million.
Revised proposals
The purpose of the consultation is to seek stakeholder views on the revised proposals for the mechanism to recover the cost of compensation. It does not examine the methodology for determining which licences require amendment or revocation.
Where abstraction licences have a detrimental impact on the health of sites designated under the Habitats Directive (i.e. Natura 2000), Sites of Special Scientific Interest (SSSIs) and undesignated local sites of importance, the consultation estimates that the costs needed to be recovered through the Environment Agency's charges scheme for non-water company licence’s is £31million. The cost of compensation for water company licence’s, for SSSI and local sites, is £68million.
Regional basis for compensation
The Environment Agency is proposing to deal with existing abstractions that are causing damage, or have the potential to damage, across England and Wales on a regional basis – a position it had originally discounted.
The Consultation contains a table outlining regional compensation costs to be recovered through the charges scheme for non-water company abstractors. Yorkshire is unaffected by the proposal as it looks unlikely that any abstraction changes are necessary. However, the cost of compensation in the Anglian, North West and Southern regions is £7million, £8 million and £9million respectively.
The consultation does re-examine whether compensation should be recovered on a national basis in England. In its first and second consultations on charges for abstractions the Environment Agency favoured a national approach for England because it considered that the costs of recovery would be shared widely as possible, and would allow the recovery of funds more quickly to provide environmental improvement.
The change of opinion stems from mounting concern that a national approach would lead to cross-subsidy between charging regions, contradict the Water Framework Directive to recover costs at a River Basin District level, and be against the philosophy of financing environmental improvements within a water company’s area.