The Water Supply (Water Quality) (Scotland) Regulations 2000

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Consultation on Regulations

Annex C — Regulatory Impact Assessment

THE WATER SUPPLY (WATER QUALITY) (SCOTLAND)
DRAFT REGULATIONS 2000

REGULATORY IMPACT ASSESSMENT (RIA)

1- PURPOSE AND INTENDED EFFECT OF THIS MEASURE

1.1. The intended effect of these Regulations is to implement EC Directive 98/83 EC which sets standards for water intended for human consumption. In so doing we aim to achieve beneficial effects in the quality of water and in public health.

1.2 The standards set in the Directive/Regulations are linked to World Health Organisation guidelines (1993) and they reflect our current understanding of adverse health affects associated with drinking water contaminants.

1.3 The purpose of these Regulations is to address public water supplies only. Implementation of Directive 98/83 EC for private and bottled water supplies, plus associated costs, will be assessed separately when the relevant draft Regulations go out to consultation.

2 - RISK ASSESSMENT

2.1 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.

2.2 Failure to monitor and control potentially damaging constituents in drinking water can expose the community to significant health risks. With a view to minimising those risks the new Directive sets out standards for the permissible concentrations in drinking water of potentially damaging substances. Hence the draft Regulations list the concentrations of constituents, such as lead, 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 standard for lead is set at 10ug/l by 25.12.13 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 and high blood pressure in adults.

2.3 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. We intend to maintain these standards in the new Regulations but as they are all continuations of current regulatory standards, there are no associated additional costs and they are, therefore not covered by this RIA.

OPTIONS FOR DEALING WITH THIS ISSUE

3.1 As we are obliged to transpose and implement Directive 98/83 EC there is no other option available to us other than to draft legislation to reflect its requirements. The Directive must be transposed by 25.12.00, the bulk of the standards imposed by 25.12.03 and the remaining standards by 25.12.13. Failure to comply with these EC obligations would result in the European Commission taking infraction proceedings against the UK Government.

BENEFITS

4.1 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 not quantifiable. However it is possible to identify that the following benefits are associated with implementing EC Directive 98/83:-

• consumers will receive water meeting current WHO guidelines

• consumers less likely to experience long term adverse health effects

• water industry saving resulting from the dropping of some parameter standards — e.g. fluoranthene, which is no longer considered as a health risk

• particularly significant benefits are likely to arise from the setting of the lead standard at 10ug/l - e.g., quoted in money 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). The 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 noted above)

COMPLIANCE COSTS FOR, CITIZENS, BUSINESS, CHARITIES AND VOLUNTARY ORGANISATIONS

5.1 Some costs will fall to domestic, business, public and voluntary sector customers by way of water charges. It is not possible to quantify with certainty the proportion of charges that may arise from compliance with the standards although a figure of it has been suggested that perhaps up to 5% of an average household bill in 2004/5 may be due to compliance. However with improvements in efficiency plus an investment of £1.8bn in the Scottish Water Industry over the next three years increases will be kept to a minimum.

* WRc Report — Cost Benefit Analysis of Reducing Lead in Drinking Water. (Figures are at 1995 prices discounted at 6% real interest rate over period 1998-2034)

COMPLIANCE COSTS FOR THE SCOTTISH WATER AUTHORITIES

6.1 It is difficult to estimate the cost to the water industry of compliance with the Drinking Water Regulations (DWRs). A single investment, for example in a new treatment facility, will be directed at a number of objectives, such as increasing capacity, installing automated monitoring, compliance with pre-existing regulations, the DWRs, the Crypto directive. It is therefore difficult to estimate what element of the cost should be ascribed to the DWRs. In England and Wales, the regulatory system includes a detailed assessment of capital investment by objective, allowing more precision. Work on a similar system in Scotland is being taken forward by the Water Industry Commissioner. Over the next two years, the period covered by the Quality and Standards paper published in 1999, investment in water treatment in Scotland will amount to some £180m. Some of this expenditure will be directed at satisfying the requirements of these regulations. The overall level of expenditure thereafter will be determined by the new Quality and Standards exercise, and will include further expenditure directed at the 2003, and subsequent, deadlines

6.2 It should also be noted that costs for meeting the lead standard are relatively uncertain. The interim lead standard is likely to be met by treating water to minimise its capacity to dissolve lead from pipes (plumbosolvency) and by pipe replacement where this proves impractical. The extent of pipe replacement required to meet the final standard will only be known once plumbosolvency treatment effectiveness has been assessed.

RESULTS OF CONSULTATIONS

7.1 In the preparation of this RIA full account was taken of existing figures and further comments were sought from the water authorities.

SUMMARY AND RECOMMENDATIONS

8.1 We are constrained by Directive 98/83 EC being required to transpose it by 25.12.00 and comply with the standards by 2003/2013. Therefore we have no option but to meet the requirements of the Directive and to meet the timescale set.

ENFORCEMENT, SANCTIONS, MONITORING AND REVIEW

9.1 Directive 98/83 EC requires us to monitor the new standards and to take remedial action to address failures. While the Scottish Executive will certainly oversee the monitoring programmes the exact mechanisms for monitoring and enforcement have not yet been decided, being a subject for consultation.

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