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Water Supplies in Public Buildings: A Consultation

Annex B

DRINKING WATER IN PUBLIC BUILDINGS
Pre- REGULATORY IMPACT ASSESSMENT (RIA)

1. BACKGROUND

1.1 This pre - RIA forms annex B of the Scottish Executive consultation paper on proposals for the regulation of drinking water quality in public buildings. These proposals address issues associated with drinking water in public buildings in Scotland and transpose EC Directive 98/83 EC (water intended for human consumption).

1.2 It is Scottish Executive policy to consult on the impact of regulations, including the financial and resource implications for citizens and business. In accordance with normal practice the Scottish Executive will publish a full formal regulatory impact assessment along with the consultation on the draft Regulations later this year. In the meantime it is possible to provide some initial analysis and the details are shown below.

2. PURPOSE AND INTENDED EFFECT OF THIS MEASURE

2.1 The main two purposes of these proposals are:

• to improve efficiency / cost effectiveness of the monitoring and enforcement of drinking water quality in public buildings in Scotland
• to implement EC Directive 98/83 EC as it relates to public buildings

2.2 The intended effect of the final Regulations is to benefit public health by ensuring that revised water quality standards are monitored and enforced effectively.

3. RISK ASSESSMENT - OVERVIEW

Risk of EC infraction proceedings

3.1 EU Member States are obliged to comply with EC Directive 98/83/EC. Therefore, failure to transpose this Directive would put the UK at risk of EC infraction proceedings that could result in a hefty fine against the UK Government.

Significant public health risks

3.2 Failure to comply with the standards to be set in the new Regulations would expose the community to significant health risks, and consequent NHS costs, due to contaminated water.

3.3 The initial consultation lists concentrations of constituents that will not result in any significant health risk over a lifetime of consumption, and will in the opinion of WHO, protect consumers from the risks associated with exposure. For example the final standard for lead is set at 10ug/l which, in the opinion of WHO, will protect consumers from risks associated with high lead levels in water such as impaired neuro-psychological performance in children.

3.4 Standards are also set to minimise the risks arising from chemical and microbiological contaminants. Risks from chemical contaminants arise primarily from their ability to cause adverse health effects after prolonged periods of exposure. There are few that can lead to acute health problems except through massive accidental contamination of a supply. In contrast contamination of water for a short period with harmful microbiological organisms can lead to serious illness and, in rare cases, death.

3.5 The UK has traditionally set some drinking water standards that are more stringent than those now required by EC legislation. These standards are based on UK scientific and medical advice. It is proposed that these standards are maintained in the new Regulations for drinking water in public buildings. However, as they are all continuations of current regulatory standards, there are no associated additional costs and they are, therefore not covered separately in this RIA.

Financial risk

3.6 The proposals are designed to minimise the potential financial impact associated with costs relating to monitoring, enforcement and improvement. They aim to achieve this by contracting research to inform the analysis of the impact of the Regulations and by giving full consideration to measures that can minimise the financial impact such as:

• committing to examining the administrative burden on local authorities;
• helping to ensure that charges reflect the actual cost of the service (cost recovery);
• considering methods of financial assistance such as:
• low cost loans
• centrally funded grant scheme
• dedicated improvement grant funded by the Scottish Executive

4. OPTIONS FOR DEALING WITH THIS ISSUE AND ASSOCIATED RISKS/COSTS

4.1 The main options would appear to be:

1. do nothing
2. develop a regulatory framework along the lines set out in this consultation document
3. develop an alternative regulatory model

4.2 It would be premature to examine each of these options in any detail. It is wiser to await consultation responses and the economic assessment that has been contracted before doing so. A full analysis will be included in the formal RIA that will be published along with the draft Regulations later this year.

5. BENEFITS

5.1 The values or concentrations set for substances and parameters in the new Directive incorporate margins which allow for uncertainties in our current estimation of risk. By definition the benefits of such safety margins are difficult to quantify in monetary terms. However it is possible to identify that the following benefits are associated with improved monitoring and enforcement of drinking water quality in public buildings:

Compliance with EU law

• The UK Government will avoid the risk of infraction proceedings and any associated fine

Health Benefits (and associated financial benefits)

• consumers will receive water meeting current WHO guidelines and Directive requirements
• consumers will be less likely to experience long term adverse health effects with a beneficial impact not only on the individual's health but on NHS costs
• particularly significant benefits are likely to arise from the setting of the lead standard at 10ug/l, for example, quoted in monetary terms in a 1997 WRc report, the benefits for England and Wales were estimated at @ £724m - @ £2741 (health benefits) and @ £124m - @ £360m (non health benefits). (Note that these benefits were assessed using conventionally accepted economic methods. However the Report states that there is an underlying uncertainty regarding the impacts quantitatively studied and that numerous assumptions had to be made in estimating costs/benefits). Scottish figures are not available. However, as a general indication of the scale of the benefits to Scotland we might state them as 10% of the English and Welsh figures quoted above

Financial Benefits

• potential benefits to tourism
• potential improvements in property values
• "non-marketed" value such as property saleability
• potential NHS savings

6. COMPLIANCE COSTS

6.1 Compliance costs will depend, to some extent, on the operational details of the charging regime and any assistance schemes. However it is possible to identify two main areas in which costs will arise:-

• local authority human and other resources (but possible to recover some costs through charging)
• remedial work to comply with Regulations (businesses, individuals, public authorities and other owners of public buildings)

6.2 A full and formal assessment of costs and analysis of benefits will be included in the next consultation document. In the meantime, a recent study commissioned by the Scottish Executive (see Annex A), stated that, based on an estimate of @ £20 per meter plus connection costs of @ £250, typical lead pipe replacement costs would be:

• school 2-3K
• hospital @ £2-5K
• health centre/surgery @ £1K
• Hotel or guest house @ £1-2K

6.3 The study also offered estimates of costs that may arise from compliance with all of the standards, including lead. For instance the best estimate of the cost of upgrading is:

• school 24K
• hospital @ £54K
• Restaurant @ £3K
• Hotels @ £30K

6.4 The study offered a best estimate for any failing parameters and noted estimated total compliance costs as:

• schools 11.2m
• hospitals and health centres @ £3.5m
• hotels @ £9.2m
• restaurants @ £0.3m

Small changes in the way we perform everyday tasks can have huge impacts on Scotland’s environment.

Walking short distances rather than using the car, or being careful not to overfill the kettle are just two positive steps we can all take.

This butterfly represents the beauty and fragility of Scotland’s environment. The motif will be utilised extensively by the Scottish Executive and its partners in their efforts to persuade people they can do a little to change a lot.

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