From: Stephen Wielebski  
Sent: 14 April 2025 15:43
To: cfe.water@defra.gov.uk
Cc: Ray Farrow 
Subject: RE: Independent Water Commission Call for Evidence – Review by Sir Jon Cunliffe

Dear independent Water Commission Secretariat,

This latest review constitutes an exceptional opportunity to not only improve the Water and Sewerage Sector but also bring into sharper focus the importance of the ‘Sector’ when it comes to the provision of new housing. If we are to meet the Government’s objective of delivering 1.5 million new homes – a principal element of UK economic growth and currently c.7% of UK GDP – there has to be a corresponding and responsive commitment from the Water and Sewerage Sector. Moreover, the necessary legislative framework has been in place since sector privatisation in 1989. This needs to remain the cornerstone of a more effective, and responsive operational dynamic and/or intervention.   

Ours is a combined response from two nationally respected, and highly experienced independent Consultant Engineers both of whom have had a direct involvement with the Water and Sewerage Sector since the early 1970’s.  Moreover, Ray Farrow, CEO of Technical Development Services (TDS), was a prominent participant in the Gray Review of the Water and Sewerage Sector in 2010/11. With our combined experience, exceeding 80 years, most of which has been spent a senior executive level, we believe that our collective knowledge and experience of the sector can make an effective and informative evidence-based contribution to this review. Likewise, the contribution(s) and outcomes of our earlier formal retainer(s) to represent the Developer/House Builder Community on water and sewerage matters/issues, and which included engagement with senior Government officials and Ministers at Defra, MHCLG and on limited occasions, HM Treasury.

This will be the third review of the Water and Sewerage Sector since privatisation in 1989. In addition to the Gray Review, we participated in the earlier Cave Review, namely, The Independent Review of Competition and Innovation in Water Markets: (Final report) – Professor Martin Cave (April 2009). In addition to a series of synergistic conclusions, respective ‘reviews’ identified serious shortcomings within the Water & Sewerage Sector. Sadly several well considered and sensible recommendations were not taken forward. In many respects, hiatus prevailed. More recently, and cognisant of the current media coverage relating to the discharge of untreated/poorly treated wastewater effluent, since sector privatisation there has been at least nine changes in environmental legislation (both EU Directives and UK legislation) that had, and continue to have, a direct bearing on the required performance standards of Wastewater Treatment Works. Unfortunately, these legislative changes appear to have been given scant if indeed any consideration as part of the price determination process undertaken by Ofwat – we have secured confirmation to this effect following a series of formal FoIA/EIR requests. This remains a serious concern.

In summary, rather than respond to each of the questions posed, we have identified a number of principal areas that we and others within the Developer/House Building Industry believe need urgent review: 

1.      The role of Water and Sewerage Companies within the planning process

Whilst companies are obligated to participate in the Local/Strategic Plan process, especially at the crucial land-use allocation stage, all too often we have found Water & Sewerage Companies do not factor into the price review, the necessary infrastructure investment to meet local planning authority housing needs, namely the discharge of each company’s statutory duty pursuant to s37 and s94 of the Water Industry Act 1991. Moreover, on at least one occasion, e.g., PR19, we found investment needs conflict between Water Companies and Ofwat, with Ofwat effectively sitting in judgement as to what levels of infrastructure investment will be allowed. (We have compelling evidence to this effect which we submitted to Ofwat in June 2021. This crystallised the following differences – Ofwat new connection numbers for PR19, 408,000 lower than those predicted by Water and Sewerage Companies; Ofwat permitted capital investment for PR 19 £200m lower than that identified by Water and Sewerage Companies). In essence, what we have now is a Developer/House Builder making a subsequent planning application tending to be the trigger for water and Sewerage Companies to respond, usually by directing the Local Planning Authority to impose Grampian Planning Conditions that stop and/or indefinitely delay new development on the grounds that there is insufficient capacity in the existing public foul sewer network or at the WwTW. This approach is less than dynamic and runs contrary to the established principle that planning authorities must be cognisant of other enabling legislation, (for example s37 and s94), the discharge of which falls to other recognised competent bodies with statutory duties/responsibilities, rather than unnecessarily condition planning consents. Furthermore, it constitutes a poor and debilitating response to Government policy to deliver 1.5 million new homes in the next five years.

2.       Levels of Service

When you have to engage with Water & Sewerage Companies many of them have no concept of levels of service. It takes ages to get replies to issues which in turn delays how a development can progress. Post April 2018 Ofwat introduced something called D-Mex. This was meant to improve levels of service, but things have actually got worse. However, there is a simple solution. Around 15 years ago the same problems occurred in the Electricity Sector. All credit to Ofgem they took forward something called Guaranteed Services of Performance (GSOP). With GSOP a number of service levels are set out with time periods and if the DNO fails to meet this standard there is a daily financial penalty paid to the Developer until they do. TDS were an integral part of both the engagement process and the eventual outcome. When introduced it was an overnight success. But Ofwat chose to ignore the GSOP concept and opted for a far less effective/responsive approach to levels of service. D-Mex persists in its failure to target the most important element of the customer journey, namely, what is required at site level and when. If we are to meet the challenge of economic revival, levels of service must be better focused on Developer Customer/House Builder need rather than an Ofwat/Sector perception.

3.      Ofwat’s Charging Rules and Water & Sewerage Company Charging Arrangements

Since Ofwat introduced its charging rules in April 2018, there has been an exponential increase in company charges levied on Developers/House Builders. As a prime example, the average increase in developer charges for 2025/26 when compared to 2024/25 exceeds 52%. Moreover, no adequate supporting evidence has been provided to justify such an increase. Furthermore, Water Company charges are not subject to any form of independent scrutiny – Ofwat merely rely on Water and Sewerage Company Board Assurance Statements, usually without question, as the requisite justification. When Companies and Ofwat are questioned on the inequitable increases in Developer charges they have effectively refused to engage and/or offered no meaningful explanation. In other words, Water and Sewerage Companies are essentially marking their own commercial homework. Going forward, for Water Companies and their charges to have any degree of credibility, they must be independently audited. Ofwat promised charging arrangement transparency from 2018 onwards – it has not transpired, and the variation in company costs for precisely the same element of infrastructure are eye wateringly significant. But it hasn’t prompted Ofwat to investigate. Prior to the onset of new charging arrangements in 2018, both Ofwat and Defra committed to writing that the new charging regime would see Developer/House Builder costs reduce, or at worse, remain cost neutral. Reality is a quantum difference that now threatens project viability in numerous instances.

4.        Water and Sewerage Infrastructure Charges

A similar situation arises when we look at Water and Sewerage Infrastructure Charges. Developer/House Builder payments for 2025/26 average £1006/dwelling – based on 220,000 new home completions/year this is a significant income stream for Water and Sewerage Companies, namely £221.0 Million/year. (Ignoring further increases over the 5-year AMP period to 2030, this generates £1.107 Billion in income – £1.660 Billion if we get close to delivering 1.5 million new homes). Until the introduction of Ofwat’s Charging Rules in April 2018, Ofwat conceded that previously generated water and sewerage infrastructure payments up to that date since privatisation, and totalling close to £2.5 billion, had never been accounted for and/or audited, i.e., income versus infrastructure investment to meet the needs of a plan-led planning system – the principal intent behind infrastructure charges. In other words, new finance for water and sewerage infrastructure investment. Ofwat promised change in the form of greater scrutiny/accountability – we are still waiting. Moreover, to try and find where when and how individual companies have expended the vast sums received since April 2018 is to embark upon an unbelievable venture into commercial/financial forensics, with little robust evidence available. Furthermore, how can Ofwat justify infrastructure charges increasing exponentially in the last seven years – in certain companies by nearly 1000%? 

5.       Nutrient Neutrality

In reality, it is clear the House Builder/Developer community has become a convenient financial proxy to fund the investment failings of Water Companies, underpinned by a lax, light-touch regulatory approach by Ofwat. The contributions we are being expected to make towards nutrient pollution mitigation are neither proportionate nor justified. New housing, when occupied, contributes less than 1% to nutrient pollution, as identified in at least two independent evidence-based reports. Moreover, as a principal UK industry contributing circa 7% to national GDP, Developers/ House Builders per se do not add to pollutant loading, it is the occupier irrespective of building typology. Why therefore is the house building industry being called upon to fund such mitigation to the extent that it is given the statutory duties imposed on all sewerage companies pursuant to s94 of the Water Industry Act 1991. This statutory duty and that pursuant to s37 must surely be part of any price review.

6.        Environmental Component/Environmental Incentives

A new developer charge was introduced in April 2025, namely, the Environmental Component. Turning aside the variable quantum associated with this new Developer/House Builder charge, how it has been determined is vague in the extreme. Moreover, there is a degree absurdity associated with this payment, i.e., it is paid by the Developer /House Builder on a per dwelling basis for the Developer/House Builder to then possibly ‘claim it back’ as an Environmental Incentive for reduced water use by the occupier of a new home. In other words, the Developer/House Builder is part funding their own incentive, with payment of the incentive effectively at the discretion of the Water Company. The lower the water consumption, the higher the incentive but after a ‘fittings approach’ to limit water use to 100/90 litres/p/day, the higher tier requirements require the provision of rainwater harvesting or greywater recycling, but both concepts are cost prohibitive (between £4000 to £9000/dwelling). As part of the price review, Ofwat has completely ignored the cost and practicalities associated with respective concepts, including how we achieve water neutrality. Likewise, the potential safety and public health concerns attached to non-potable water use in the home – see Anglian Water. A more rigorous assessment of Environmental Incentives is therefore called for. Similarly, responsibility for the adoption/maintenance of water reuse infrastructure.

The issues flagged above have been expanded upon in a progressive series of evidence-based Independent Reports authored by respective respondents – see below. Each of these reports contain far more detailed and robust evidence. They can be made available on request. In addition, the red text contextualises the relevance of each report. When read in date order, the reports provide a compelling case of a part of the utility sector that has maxed it monopoly position, whilst ignoring its statutory duties and responsibilities. Importantly, many of these reports have been widely circulated, including to Defra, MHCG, Natural England, Environment Agency, Ofwat and a number of water and 
sewerage companies. In addition, when related webinars/presentations have been organised, attendance from various partner and stakeholder interests has been prolific and without dissent. That said, and perhaps of real noteworthy significance, is the fact that no part of the content of respective reports has either been challenged or rebutted, even by the arms-length bodies cited.   

August 2020 – Why the Water & Sewerage Sector Reforms Will Cost  House Builders Significantly More (This Informative sets the benchmark for what was and has been allowed to transpire in the subsequent 5 – 7 years, and largely at the behest of the Regulators)

October 2021 – Ofwat’s Charging Rules: What Has Gone Wrong (A more detailed benchmark of WaSC charges imposed on house builders at the time and to be compared with the latest charges for 2025/26. This comparison aligns with our observations in the August 2020 Report).

April 2022 – Existing Foul Sewer Capacity: A Cost Equation Seriously Weighted Against Developers (How Sewerage Companies use subjectively determined network capacity limitations (and spurious hydraulic modelling) to influence the planning process in ignorance of their statutory duties pursuant to s94.)

November 2023 – Nutrient Pollution & Nutrient Neutrality: Is House Building Culpable or Just a More Convenient Way to Fund Regulatory Failure? (This independent report was placed in the public domain in early 2024. It crystallised the outcome of specific research that identified serious flaws in the Natural England nutrient calculation methodology, in addition to the failure of Sewerage Companies to effectively discharge their statutory duties pursuant to s94. For simplicity of understanding the webinar below is conceivably a shorter synopsis of the research findings).

January 2024 – Webinar/Presentation: (Same Title as the previously referred to Independent Report of November 2023 but a succinct summary of the research findings).

December 2024 – Planning Reform Working Paper: Response to Call for Evidence (Development & Nature Recovery) (This was a formal submission made to both Defra and MHCLG – it was not acknowledged by either Government Department. Moreover, in the context of new housing provision, it helps demonstrate how Defra and MHCLG effectively ignored highly relevant and material evidence and proceeded instead to change nothing as it went on to publish the Planning and Infrastructure Bill.

January 2025 – TDS/WAC Short Paper: Here is How the Government can Approve 100’s of Planning Applications and Deliver 1000’s of New Homes. (The Secretariat may find this to be a very useful 4-page summary, inclusive of recommendation)

March 2025 – WaSC Charging Arrangements (2025/26) Webinar/Presentation by TDS and WAC. (Unequivocal evidence from Water and Sewerage Company documents to demonstrate how Ofwat and the sector has a whole is abusing its monopoly privilege. The evidence contained in the webinar/presentation needs to be compared with content of the October 2021 Informal Report).

There may a lot for the Secretariat to digest, but the evidence is compelling that both Ofwat and the Water and Sewerage Sector in general have failed on several counts. The veracity of any price review is highly questionable. Moreover, to date, both TDS and WAC have been involved in recovering circa £1.25 million from Water and Sewerage Companies that have applied highly subjective criteria to leverage unnecessary funding from Developers for spurious foul sewer network reinforcement, having failed to meet their s94 statutory duty – a duty upheld by the Supreme Court.

We are more than happy to disclose our reports. Likewise, to meet with the Secretariat. We therefore await your response.

Yours sincerely

Stephen Wielebski CEnv; MSc(Dist); C Build E; FCIOB; FCABE; MIET; ACIArb; FRSA 

Principal Partner/Consultant

W A Consultancy Limited

Ray Farrow

CEO Technical Development Services

A copy of our biographical details has also been provided:

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Stephen has extensive experience in the house building industry having entered the construction industry in June 1969. As a Civil Engineer/Technical Director, he has worked at a Senior Executive level for major House Builders since 1978 until the creation of WA Consultancy in 2015. Stephen is a Chartered Environmentalist and Chartered Building Engineer and has a Master of Science degree, with Distinction, in Environmental Geotechnics. His considerable experience includes the investigation and remediation of contaminated land, geotechnics, earthworks, foundations the design and construction of highways, water/sewerage infrastructure and utility services, with specialist skills in all aspects of land acquisition due diligence. 

Stephen also has experience in land purchase contract law/conveyancing. From 2008 until 2018, Stephen was a member of the Government’s Building Regulations Advisory Committee. 

His significant contribution to the Construction Industry has been recognised by the Chartered Institute of Building, who in April 2011 conferred upon Stephen the rare honour of an Honorary Life Membership of the Institute. Seven years earlier, (July 2004) Stephen attended the Queen’s Garden Party, having been nominated by the Royal Society for Arts Manufacture and Commerce in recognition of his achievements and contribution. 

More recently, WA Consultancy provides technical advice and guidance to house builder clients, mostly SMEs, together with several peer group consultants on matters specific to water and sewerage sector legislation and reforms. From March 2015 until June 2020, Stephen was one of the HBF’s Senior Consultants providing guidance in each of the areas identified previously, in addition to representing the house building Industry at Senior Government level.

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Ray, having qualified in 1977 with a Diploma in Engineering Surveying from Trent Polytechnic, embarked on a career in the Civil Engineering Sector. After over seven years of working on a number of major Civil Engineering projects in the UK including the Flotta Oil Terminal in the Orkneys, the Humber Bridge and the reconstruction of Twickenham Rugby Stadium in 1983, he decided to change the direction of his career and take up the role of an Engineer with a House Builder. Over the next seventeen years, he held several senior positions including a Building Director and Technical Director with Westbury Homes. 

In November 1999, he left Westbury Homes to start Technical and Development Services an Engineering Consultancy focusing on the utility issues and project managing post development issues for developers. This is now a National business operating from four Regional Offices where Ray holds the position of Chief Executive. 

Over the last twenty years, Ray has acted as a Senior Consultant for the Home Builders Federation on Infrastructure issues ranging from the formulation of policy and legislation with various Governments as well as providing practical guidance to developers on the legislative changes that are taking place. 

In light of the work he undertook in relation to the Flood and Water Management Act, he was invited to attend the Queens Garden Party in May 2015. 

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