Good morning everyone and welcome to this meeting of the Environment, Food and Rural Affairs Committee. The Committee turns its attention today to the work of the Environment Agency and we are delighted to be joined this morning by Philip Duffy and Alan Lovell. Gentlemen, for the benefit of those who are following our proceedings and indeed for our own official record, can I invite you to introduce yourselves and explain your roles to the Committee please?

I chair the Environment Agency, which I have been doing for just over three years.

I am the chief executive and accounting officer for the EA.

We appreciate your attendance and engagement, gentlemen, and we have a range of questions covering the work of the agency. If you listen to Radio 4 first thing in the morning—as I do—you will know that we are not the only Committee to have interested ourselves in the work of the agency. It would be remiss of me not to just pick up a couple of points that have been raised by our colleagues in the House of Lords, who have published a letter today that was sent to the Secretary of State in relation to serious and organised waste crime. You will have seen the terms of the letter, I presume?

Yes, I saw it yesterday afternoon.

It does not make for comfortable reading. It covers a number of areas that this Committee and previous incarnations have already raised concerns about. We will return to some of this later in relation to enforcement, but before we come to the meat of what we want to talk about, can I just briefly raise a couple of things that the Committee and the Lords say? “Regrettably, we have not been able to establish the exact cause or causes of the failures to prevent and effectively prosecute waste crime but it’s difficult to conclude that incompetence at the Environment Agency has not been a factor.” Ouch! How do you respond to that? Is it a fair comment?

No, I do not think it is a fair comment, actually. This is a great example of a report that does not match the headlines. We work very constructively with the Committee and provide extensive evidence to it about the enormous amount of work going on to try to tackle waste crime. We totally recognise this is a deteriorating position across the country. We have moved with remarkable speed over the last three years to tackle waste crime in all sorts of areas. Actually, the report is rather fair and balanced beneath that comment you read out. It describes quite a lot of things that are going on, notably some extremely impressive progress on prosecutions, tackling proceeds of crime, accelerating our work with law enforcement partners, setting up the Economic Crime Unit, getting POCA seizures, a very significant performance on prosecutions, tackling illegal waste sites—a record performance last year on reducing those—expanding our work with HMRC, and going after proceeds of crime through a wide variety of different techniques, not just classic EA areas. There are also things in that report that we would disagree with. It is completely untrue that we prioritise compliance over non-compliance; that is a complete misreading of the situation. There is a huge amount of work going on. It is very unfair to my hard-working staff to be accused of incompetence. They are not incompetent; they are doing a very good job in very challenging circumstances. We are turning around the situation on waste crime. We are very proud of our record on it in the last few years and are very happy to discuss more detail from the report if that is useful, Chairman.

I will leave our colleagues in the Lords to defend their own work. But just when you are talking there about enforcement, a point they make at number 8 is that no one has ever been convicted of landfill tax fraud, despite there being a tax gap in the difference between what is paid and what is theoretically owed of 22%. Do you feel you have a role in that?

That is a comment you probably should address to HMRC as the lead prosecutor for tax evasion and that form of financial fraud, not the EA. But what I can tell this Committee is that in the last three years, we have conducted 194 prosecutions. We have also undertaken 84 enforcement undertakings with gangs to pay out money and 30 proceeds of crime orders have been issued. In the first year of the Economic Crime Unit, it undertook 21 money-laundering investigations, there were six asset-freezing orders and 13 confiscation orders. As you know, I have a background in law enforcement; I was nine years at the Home Office. That is an impressive set of totals for a small unit, showing a very proactive law enforcement stance towards that. One other thing that was misread in the House of Lords report is that in dealing with organised crime, you pick the tool that is most disruptive to the organised crime gang. You look at the way you can go after and disrupt their activity: you seize their assets, think about prosecuting for other offences, and put the entire armoury of law enforcement against an organised crime gang. That is the right way of dealing with it. What you do not do is simply stipulate particular offence categories because you may not have the evidence to do that. That is our approach. The joint unit is very effective at sharing intelligence on that. A comment in the report—maybe you will put it to me—is that other agencies prosecute these criminals, not the EA. That is good and is a successful approach to how you deal with complex law enforcement operations. I would not in any way underestimate how serious this problem is.

When do you think we should see a different set of outcomes in this area if you are making these changes to your work?

We are already seeing a reduction in the number of illegal waste sites that are operating in the UK. We are getting better at closing them faster. We are also seeing more serious prosecutions that take time. I am not sure if I would characterise it as being the new narcotics, the comment I read in the report, but we are seeing a move of OCGs—organised crime gangs—into waste. It is moderate, but it is there. What the Government are doing to help us in this endeavour—which is very helpful—is tackling end-to-end, everywhere where waste leaks from the system and criminals can tackle the system for arbitrage. So whether that is in terms of making sure that we cannot illegally export waste, modernising the regulation of carrier broker-dealers, or making sure that we have the right powers—including other law enforcement powers—to disrupt OCGs, including asset seizure, we are going to make progress on that. If you look forward to the year ahead, it is a big year for us on waste. Tackling green-list waste exports is a principal issue currently in abuse, which comes in in April. We previously had no power to do that. If you declared your waste as being amber, we could charge you and regulate it. But if you declared it as being green—ie completely harmless—we had no power to regulate it. What a ridiculous situation that was for us to be in. That is going to be fixed from April next year. Alongside that, we are able to recruit more people to tackle that work; we have 30 more people joining us who will be specialist crime investigators. The year after that, we have the waste tracking system at DEFRA coming in. That is vital to us in order to make sure that waste does not go missing and that we can hold people who mishandle waste to account. The other thing that your colleagues in the House of Lords got a little wrong was that it is not the case that the well-regulated waste sector opposes these changes; it welcomes them because its business is being systematically undermined by organised criminals. If you are a Veolia, for example—a compliant company—you will want us to go after those companies. You will want to make sure the waste you pass from the household to the local authority and the well-regulated waste centre does not subsequently disappear either to a low or middle-income country or to an illegal fly-tip waste site. So there is a lot going on with waste. We have done a lot in the last couple of years. I do not think my very excellent and hard-working waste team should be ashamed of its progress, but there is a lot more to do.

The House of Lords talks about a merry-go-round of reporting experienced by the public and suggests the setting up of a single telephone number. Why do you not have that already?

Because the law as it is currently structured—of course it is a matter for this House to decide what the law is—is that the responsibilities for fly-tipping do not sit with the Environment Agency. It is possible for us to look at that again. We have a lot of fly-tipping work.

A merry-go-round starts then.

I do not think it is a merry-go-round to have two numbers, if I might say so. But it is true that responsibility at the local level is split for the waste criminals, the EA and local fly-tipping between local authorities. That can be a source of frustration for citizens. We are very happy to look at how we deal with that. Currently, when we get calls into our call centre—we get about 100,000 a year across all sorts of pollution reporting—a lot are low-level, smaller fly-tipping. I say low-level; it is not low-level if it is outside your house or in your garden, I appreciate that. We can pass that on to the relevant authority. But we have to be very clear in the EA about what we can and cannot do for communities. At the minute, responsibility for some of this sits with local government rather than the EA.

In fairness, it has to be said, the police do not emerge from this report unscathed either. How do you characterise the relationship between the agency and the police?

We currently have very good, deep links with the ROCUs, the Regional Organised Crime Units. They are fully present in the Joint Unit for Waste Crime. We also have very good links with the National Crime Agency for the upper end of organised crime that is penetrating this sector. There are some real problems. One is intelligence flows because it is difficult for us to access intelligence flows that are stored at constabulary level. We have a different vetting system: we are national security vetted, not police vetted, so that is one problem in the system that can gum up flows of intelligence across the area. Not all police authorities and constabularies are as attuned to the dynamics around waste crime. A good example would be Kent. We are very closely intertwined with Kent because we do so much work on organised crime in Kent with waste, but elsewhere in the country it is a bit patchier. We are tackling that through the ROCUs. That is probably the right answer. They are the place where the organised crime mapping intelligence flows, and we have the right systems currently in the EA to interact effectively with the ROCUs and the National Crime Agency to make sure the more serious intelligence is being processed properly.

Can I take you on now to the future shape of the agency? The Cunliffe review came forward with proposals that would take your role in relation to water pollution out of the Environment Agency and put it into some sort of new super regulator. How do you see that affecting the work of the agency going forward?

Let us just start with the Cunliffe review itself. We were heavily involved with the production and preparation of that document. Sir Jon Cunliffe and his team had many hours of meetings with us to talk through how catchments, rivers and water abstraction work and how we have to think about the planning of it and the complexity of the water system. We took him through why we have 19,000 separate lines of activity in the WINEP for AMP8. A lot of that thinking is reflected in the document. There are a number of things that we really support in the EA. The key point is that we very much support greater integration between environmental and economic planning. When you are spending the thick end of £100 billion of billpayers’ money every five years, if you can squeeze out even slightly improved efficiency in how you devise your programmes of work, that is billions of pounds.

I am looking for something that is a bit more strategic here. If you strip these functions out of the Environment Agency, what does that mean for the rump that is left? Environment Link said that you risk being left as a runt of the litter.

Where we are currently on structure—DEFRA officials have confirmed this—is that we are looking at form before structure. That is the right answer. The wording used in the document by Sir Jon Cunliffe is “water functions”, but he does not actually get into a lot of the detail of what the Environment Agency undertakes. He does not get into things like fisheries, invasive species, weir and water management, groundwater source protection zones, dealing with runoff from landfills, and thinking about the fire service and how we relate to them in managing water. There is a lot of detail there that is not clear. What Ministers are doing right now—in my view, entirely rightly—is measuring twice and cutting once. Where I was going with my first point was to say we are very supportive of unifying some planning functions across the organisation. That would potentially add a lot of value for the environment and billpayers. We are also very keen to see greater join-up between us and what is currently Ofwat on enforcement for the water industry. We do not think the current system is effective or tautly governed. There are lots of areas there where we would be supportive of change. It is too early for us to say what the change will be. The Government say they want to bring out a White Paper before Christmas; that will give us some more clues on that. We are talking pretty much daily to different Ministers and officials about that, and when we have heard their decision, we will work with them to make it happen.

Perhaps I could just add on that we are also working very closely with Ofwat in a number of areas that do not require legislation so as to progress those many aspects of the Cunliffe review that we think are positive. Philip mentioned a couple. In terms of longer-term planning, there is a clear gap in the water industry at the moment. Other areas are enforcement, delivery monitoring frameworks so that we are jointly looking at water company performance, data sharing, and moving in the direction that Cunliffe recommends of supervision, ie taking each water company separately instead of seeking to average in terms of performance management.

Just on water regulation, you have increased your staffing from 130 to 340. What prompted that change?

What prompted that change was that our numbers had declined over the years on water inspections. The previous Government recognised that that needed to be put right. The numbers are such that in the year before last, there were 1,400 inspections of water companies, last year there were 4,500, and this year there will be over 10,000. That is one of the aspects that is seeking to improve the performance of the water companies.

Is there a risk here that you are actually just recruiting staff to then lose them to the new super regulator?

As far as I am concerned, if they are doing a good job, it does not matter where they are doing it. This is essential work. Where we are clear is that our policy units and some elements of our enforcement effort definitely need to go into the new regulator because coherence between those two will make for a much better result. Beyond that there is doubt, on which we are investigating and which DEFRA is of course leading on. One is the water company inspection team, the people you have just talked about. Beyond that, we could go out to the area teams and then we could get to flood, which was not mentioned by Cunliffe. It is an open book at the moment as to where that line is drawn, but what we are all agreed on is that some element of it is vital. Much of that we can get on with straightaway, and we are.

What Cunliffe is talking about with this new regulator is that it could have constrained discretionary powers. We would be able to award higher salaries and may develop a very different relationship with both industry and Government. Are you looking for the same sort of powers for yourself for what is left? You were created in 1996 and the whole purpose of you then was to bring everything together under one roof.

The EA has had a very successful record of site-based regulation. There are a number of problems with the Cunliffe review, but they do not really derive from our work in site-based regulation; they derive from errors in planning and enforcement on the water industry over many years. That is what we need to fix and is what Ministers are attending to. In terms of pay and all those issues like that, it is no secret that the imposition of civil service pay constraint on the Environment Agency in many areas has been a mistake. I have civil service pay constraints on things like electricians and charged engineers and these people do vital work keeping the country safe, keeping this very building safe in the case of the Thames barrier. So there is a case for looking at some of that and I am making that case to Ministers and the Civil Service every day, particularly when we have these highly specialised skills. That is an area we should look at. We are a creature of Parliament. As you say, we were set up under the Environment Act 1995. We have to follow the law that Parliament has set out. In general, as it applies to the environment, that law does not provide for a concept of constraint discretion.

Should we be looking for that then as Parliament revisits these things?

In the context of water, what we need is outcome-focused rather than input-focused regulation. We do not have cornerstone targets for things like phosphorus and nitrogen pollution of our rivers, which we could plan to reduce over time in a coherent and cost-effective manner. Instead we have a whole series of quite detail-specific things that must be done in the same way everywhere around the country, and that is underpinning the European legislative framework that we work to. Whether that gets changed is a matter for Parliament, and that is the real issue that would help unlock some of this progress rather than the structure.

Perhaps if I may just answer the particular point you were making. We think that we have had a justice gap in that we have been limited in our ability to enforce because of the lack of automatic penalties and variable monetary penalties on which action has been taken. Ofwat has also had the great advantage of being able to threaten 10% of revenue fines and then to agree an enforcement undertaking, as it has just done with five of the water companies. Having that sort of capability in a joint unit is going to be a great advantage. What we have not talked about yet—which is a very good point that you make—is do we want those sorts of powers for what is left? We have not started to think about that yet, but it is a very good idea that we should be putting some effort into.

Finally, you have the Cabinet Office with its review of arm’s-length bodies. It feels like you are being got at on all sides here. What impact do you think that might have on you, or what is left of you after the new super regulator?

The first point is that it depends on where the line is drawn. We would be cautious. I put it no stronger than that, but we would be cautious about splitting our area teams into water and other because it is important that they are viewing the whole landscape and that they have the strength of numbers to play a real role. It very much depends on what is left.

Surely that is inevitably what is going to happen, is it not? You have a different body running to different Governments.

It is an open question at the moment.

Coverage of our structure is somewhat above our pay grade really; it is a matter for Ministers and Parliament. There has been a discussion about the future of the EA—continuously in various different forms—every year for the last 15 years. We could let that get to us and undermine the important work we are doing, delivering our targets and our mission, but we are not going to. We are going to stay focused on improving the organisation, on delivery, being more efficient, and becoming the EA that the country needs. That is our focus right now rather than speculating on what may or may not happen with a future review.

We are going to move on to look at reforming for economic growth. Welcome to the Committee, Terry Jermy, a new member of the Committee. You are very welcome, Terry.

Thank you, Chair. Over the summer, I visited an onion farmer. He had just been notified with about a week’s notice that his abstraction licence was going to be suspended. What that meant was that the yield for his onions for that year was something like 40% down. It was absolutely crucial to his business. Frankly, I had never seen such small onions as when I went to visit that farm; I was really shocked by the impact. His challenge to me was that the Environment Agency was purely looking at his abstraction from an environmental point of view, not a food security or local economy point of view. This was a significantly expensive reduction in yield from the onions. When considering permitting and your liaison with farmers, to what extent do you consider food security and impact on local economy and economic growth?

Absolutely is the answer. We regret that specific case. It is fair to say that the impending drought during this summer required us to take action on abstraction in a rather more sudden and, I would acknowledge, less well-prepared way than we would have wished. There is some learning attached to that. But it is absolutely fundamental to us in all our dealings with farmers that we recognise their prime business need and the importance that they are playing in the country. That balance between the good of their business and our requirements is uppermost in our mind. As I am sure you are aware, our regulation of farmers is advice-led. That is always our top priority and is why there are a relatively small number of farmer prosecutions. Some people would say there should be more. But that is simply because we are doing what we can to help their businesses, and on balance that is right.

A key criticism was of poor communication. You obviously undertake regular monitoring of water levels; that is part of the core of your business. Why is communication with farmers so poor when you are essentially not allowing them to forward plan from a business point of view? They cannot make business decisions because, at a moment’s notice—in this case, a week’s notice—that decision effectively finished their business for that summer.

I have looked at the detail of this particular case, Mr Jermy. You wrote to me after the case and we had a number of engagements with you and other colleagues from across the east of England on this particular case. It is one where we do regret how that particular issue was handled. Of course, this was a so-called hands-off restriction on water use in and around Norfolk and the east of England, and we would point out that this was a return to previous practices in terms of water abstraction. More generally, we are trying our best to make sure our engagement with farmers is as good as possible. We have dedicated teams. We recruit heavily from farming communities. Many of our staff who work on farm regulation come from farming backgrounds. We make sure they understand how the farming industry operates and the cultural and social issues involved with farming. We make sure they have had good training on how to approach farmers, many of whom are small businesses often in quite a lot of distress. So we take a very different approach to how we would regulate the water or waste industry. As the Chairman was saying, we have been criticised for that. People feel we are not sufficiently stringent on farmers, but we are feeling that this slow engagement with farmers—this real focus on communication—is actually paying dividends. You will have seen some products we have handed out to farmers about preparing for an inspection. We are also on YouTube. We reach out to a lot of the channels that farmers deal with in the media to try to improve that liaison. The drought conditions this year took us by surprise. We saw the water levels dropping much faster than we thought they were going to, and we regret that we did not get that communication quite right in that one case. Generally we are trying to take a balanced approach towards the farming community, and we have relatively positive feedback from many farmers on their interactions with us. Not always, but generally.

Thinking more widely, there have been previous attempts by Governments to encourage regulators to think about economic growth—for example, Growth Duty, Regulators’ Code. Have those reforms worked? Does the EA actually properly consider economic growth when going about its day-to-day work?

The first thing to say is that it was part of our original brief in 1995. Sustainable growth was one of two aspects that we were tasked with looking at. It is fair to say that the environmental aspect has edged ahead over time. Over the last 18 months, we have made a tremendous amount of progress in terms of the growth agenda. We are very supportive of many recommendations of the Corry review, for example. We are on the case with setting up a lead regulator so as to make life easier for developers. We have been appointed to two roles in that and are supporting the MMO on another. We are looking carefully at what is called earned autonomy, or the Trusted Partner Initiative, so that good companies that we trust—The Rivers Trust, The Wildlife Trusts and such like—can move ahead and make changes under a controlled mechanism. Across the board, we are implementing permitting changes. It has been a big issue, and Philip will touch more on that. We recognise it is the area of our current performance measurement that is falling short and is something we need to put right. There were two areas at the start of the year. One was our performance on planning response and we have cracked that. We are now at target on that; we have been since July and are responding within 21 days 90% of the time. But we are still behind on permitting, which is a vital area for getting right in terms of the growth agenda and is our top priority at the moment.

Thinking about it from the other point of view, obviously the environment is also important to the economy. Environmental tourism is significant, particularly in Norfolk, and there are risks by changing the approach to be more growth-heavy, particularly risks to the environment. Do you feel as if the EA has the capacity to manage those risks with that changed approach? If you are considering moving towards more of an economic growth default position, are you able to sufficiently protect the environment?

I do not think I would characterise the trade-off like that. Process improvements are relevant; it is not good if you are a scheme promoter and do not have your permit or planning consent in time. But that is not about changing the substance of the regulation. It is not about giving consent to a house that is going to face flood risk or an incinerator that has poor air quality; it is about making sure that process is faster. That is different from changing what you might call the risk bar or the appetite for risk in the area. There may be a case for both. So far, we have been really focused on process improvement, making sure we are a quicker, more responsive regulator that meets its targets. That is not about changing what we do or how we make decisions. We are actually now looking a bit at places where we think we are doing too much permitting. The Chair mentioned earned autonomy. We put The Rivers Trust through the same process we put a water company through. Is that proportionate when it is trying to improve the local environment? No, it is not. There are some areas where we can safely make some careful changes. But there is no point having an Environment Agency if it does not stand up for the environment and for protecting people and the environment where we have to. We have not had any pressure from anyone really to change the nature of the decisions we take where we are taking a well-evidenced decision that is protecting people in the community and the environment. There are lots of examples of us doing that recently.

I have a specific question but it goes to the issues that you are talking about in relation to permitting. We have a bit of a crisis in Cornwall at the moment with septic tank waste. I have a company—lots of them actually—that have been moving it hundreds of miles to take it to South West Water treatment works. It has been quite ingenious and has set up its own water treatment plant but has been struggling to get a permit. It applied last December, had no response until August, and was then asked for a lot of very detail-specific reports and information in a short period of time. Before the end of that short period of time, it was told that its case was closed and some of the fee was kept. We contacted the EA, which has been very good to be honest, and we are now looking at a more specific pre app to see if it can get through that way. But it made it clear that those kinds of delays have been impacting growth because that is a massive issue in Cornwall and something that could be helped with. The complexity of the requirements that the company was asked to comply with was very difficult. It did not have any support to comply with those. It said that previously the EA may have helped, but now it is basically told, “You’re on your own; go away and find an environmental consultant,” which it has. But even then, we are looking at a three-month, maybe six-month delay to go through this complex procedure. In those kinds of circumstances, what will you be doing to make it quicker and easier for smaller businesses to comply with these very complex regulations?

Ms Kirkham, you raise a set of very important points, which I agree with. As the Chair has said, the area of our performance that is really very concerning right now is our permitting service. It has been under massive pressure. There are various good and less good reasons for that. There was definitely a bow wave of work after covid when the economy reopened. Because we are tightening legislation on water, we have to re-permit an enormous number of water facilities. Just to give a sense of that, under AMP8 we have to repermit around 2,500 storm overflow sites. It is a lot of extra work for us to get through and we are struggling in places with the specialist resources we need. All that said, there is a great deal we could do to make the situation better. I am very pleased that when you contacted us, we were able to help. We have introduced a tracked service. It is actually a form of making sure we are really clear: if you pay us, we will help you make sure your paperwork is in good order and all the questions that you have to answer have been answered. That is getting us closer to the advisory services we used to offer.

How much does that cost? Is that an extra on top of what it used to be?

It is extra. We have over 40 permit categories, so I cannot give you a number for that particularly, but in general, the permit cost is a relatively minor part of the project cost. But let me continue for a second. We are also worried about the volume of information we are asking for, particularly at the simpler sites. That would be things like a packet treatment work at a campsite, for example. We see a lot of those in the more rural areas, for example Cornwall or Cumbria. We think we could deregulate that quite a lot, not by changing the standards or cutting corners on what the operator needs to do, but by reducing some bureaucratic burden around that: asking fewer questions and making the process a bit more straightforward and simple. On the legislation, you will understand there is definitely a part of the debate that says that we need very tight regulation of sewage treatment works, even small ones. A lot of diffuse pollution we see in waterways around Cornwall is from very small treatment plants. We have recently done a big exercise in and around Windermere where we have gone to visit every campsite, off-grid Airbnb and hotel, and we have found some modest—but they all add up—compliance problems with those areas. So we are under a countervailing pressure to make sure that if you are running a very small treatment plant, it is being maintained at an adequate level.

It collects waste from across holiday parks and has built one itself already on quite a decent-sized scale. It has been asked to conduct tests, but of course it cannot do the tests until the treatment works is up and running. It has become a bit of a circular situation.

I can see that. What we do need to do is make sure that—

I have to move us on because we are a wee bit under pressure of time. I see Jenny and Henry wanting to come in before I come back.

Mine will be brief because it is on a very similar theme to Jayne’s: licensing permits. Just to add two examples to that. I would say it is probably the biggest amount of casework that I have about the EA in my inbox from farmers and river partnership trusts. Licensing for farmers will often cost 600 quid to get a licence to do mandatory works that need to be carried out on public roads or ditches, but it can take months and months to get the permits approved. So they are paying for the privilege for a system that is incredibly slow and delayed to do public good, essentially. That is something that can be put right with just a will and determination and I appreciate resourcing is part of that. Secondly on the rivers. Again, this is partly for economic growth, but actually it is just for vital environmental works that it takes so long to get approval, have the right conversations and move forward necessary and critical works to many of the rivers in my constituency, including the old and all through the partnership. So just to reiterate, it is my biggest casework, and actually often—twice now—I have had to request Ministers to join me on a meeting to talk through some blockages in permitting those licences.

On the rivers, we have quite a good plan that will fix a lot of that. If you are The Rivers Trust, for example, or another form of NGO undertaking ecological or environmental works—for example, the National Trust is a big user of our permits—we think we could move to what we are calling a trusted partner status, where we would not ask the same permits for work of that nature. Obviously, if you are doing a major piece of work that would affect flood risk, it is right that we ask for a permit and that we assess that permit properly. With some delays we see on things like road projects, those projects do have very significant hydrological consequences that could flood homes, properties and farmland elsewhere. So we have to get that balance right in managing that risk appropriately. On the smaller sites, I entirely share the frustration with that. We need to be faster and quicker on those areas. We are also looking at whether we really strictly need all these permits, whether they are legally necessary or not. The law is quite binding on us under the Environmental Permitting (England and Wales) Regulations 2016 in terms of making sure that we ourselves have come to a view on whether something is risky or not. We are trying to push the envelope a bit and manage some smaller schemes where the risk is manageable.

You have mounted a robust defence of the Environment Agency this morning. I have looked at your CV in terms of you being at the Home Office, Border Force, then there is Treasury, now the Environment Agency. You have seen politicians come and go. We have been talking a lot about the growth agenda and the priorities of this Government. Do you think the Government demand too much of the Environment Agency?

No. The Environment Agency has a critical role in enabling growth and sustainable development around the country. If you look at the work we are doing on things like the New Homes Accelerator and the New Towns project with a lot of mayors, unlocking that growth by setting out where the environmental limits lie and providing an integrated site-based approach are ways you could accelerate development in a sustainable way. That is an enormous positive for the country and the economy as a whole and the EA is excited about the role it can play in that.

Jayne, we will come back to you to lead the questioning on environmental inspections.

Last year, you told the EAC that you were not doing a good enough job of protecting the environment. Since then, the Office for Environmental Protection has shown that many environmental indicators are on the decline and environmental laws are not actually being adhered to. Do you think we are heading into a culture of non-compliance, which is pushing down those environmental outcomes?

I certainly do not, but I agree that the data for 2024 in particular was very poor. Let us start with water. The environmental performance assessment that we announced last week showed a 60% rise in serious pollution incidents, which was very unfortunate and a dismal performance, as I said at the time. To put this in context, the fact that we awarded last year—2024—a total of 19 stars to the water companies out of a total of 36 was actually the lowest that we had awarded in any period since the EPA system started in 2011. But very importantly, during that period, we have been increasing our standards and setting higher criteria. If you actually applied the 2023-24 criteria back from the beginning in 2011, you would have seen an increase in stars awarded on an almost straight line from 11 in 2011 up to 25 in 2023. That showed an industry that was making good efforts in some areas to make a difference. The 2024 data is dismal, as I say, and we need to ask why. There are three principal reasons for that. One is that there has been long-term underinvestment in the sector for at least the last 20 years, but you could say back to Victorian times. The assets have not been properly maintained, there is continuing decline, and therefore another year on will be slightly worse. Let me just pick up what we and the water companies are doing about it. A very important step was PR24 and the spend for the next five years of £96 billion for water companies within England. That will be the start of some improvement of the most fundamental reason for the bad performance at the moment. It will not be achieved in five years; we need to be clear about that. You do not make up for 20 years of underinvestment in five years, but it will be an important start. That is point one. Point two is that it was a very wet and stormy year. We never allow weather as an excuse because water company assets should be resilient, but it is undoubtedly a factor. It is particularly the stormy element and what that does to the power network. About a third of the pollution incidents last year—particularly for the northern water companies—were caused by power outages because the power network is simply not strong enough. That is a serious issue that we need to take up with Ofgem and the electricity companies because there is a limited amount that the water companies can do by themselves.

I suppose it was not just water; there were also some goals for clean air, maximising resources and minimising waste.

May I just finish water, because it is so important? Then we will pick up some other points. The third aspect is that undeniably the amount of focus that there is on water pollution incidents—including our increased number of inspections—is causing more to be identified at the time. So there is some element of the position getting worse before it gets better. But to summarise on water in relation to your question, I do not think it is fair to characterise this as a declining performance and certainly not as a failure by the Environment Agency to do what it has to do to improve performance. Philip, other sectors?

On air quality, if you look at the key performance metrics we have, which are really about pollution from regulated installations—refineries and incinerators—we have seen significant progress and a high degree of compliance in that area. Waste is a bit more troubling. It is worth going through a few numbers for the Committee. Ninety-three per cent of the 14,000 installations we regulate are at compliance level A and B, and 2.7% of them are at bands D, E and F. That means they are not compliant and are not meeting the terms of their permit. Of that, overwhelmingly it is waste that is noncompliant; we have a real problem with noncompliant waste installations. In addition, last year, we had nearly 17,000 reports of waste crime. Clearly, as we discussed at the start of this meeting, there are some issues around waste compliance that we need to tackle. They are in the long tail of that sector, which is not generally compliant. We are seeing some progress on both farming and water companies.

Do you think it would help if there were more inspections and more obvious standards for those inspections going forward? Because there have not been those ad hoc inspections.

On water, we are going from 4,000 to 10,000 this year, so that is a lot more inspection.

Are you going to introduce standards for inspections?

We have standards for the water industry. When we go to a water installation, we are inspecting it against what we expect it to be doing. Against those standards, somewhat depressingly, around a quarter of the sites have failed. Often it is rather a minor failure, but it is telling us they are not looking after their assets appropriately. We have published all that, so you can find your local wastewater treatment plant inspection on our website. On farming, we also have the Farming Rules for Water; we are very clear on the standards that farmers need to meet. With funding from DEFRA, we are increasing our farm inspection programme from 4,000 to nearer 6,000 per annum. The main source of failure there is failure to have soil studies for nutrients. We also have problems with cover crop, clean and dirty water segregation and slurry management. We are seeing some tentative signs of improvement in that work. We think there are 105,000 farms in scope for our inspections, so doing 6,000 a year is not a huge number, but we are targeting those, particularly in the areas we think the pollution risk is greatest. That is really in the areas where we have protected waters and in the dairy industry.

Do you have any concerns about the risk-based approach to monitoring or do you think it is good enough? Do you think that that will impact how much the pollution risk is being addressed that way?

I certainly think it is the right thing to do and that it is making a difference. We pick up information from all sorts identifying poor performance, including drones these days. That is where we should be focusing

Do you think there is enough intelligence and it is not impacted by your resourcing, for example? Is that limiting the amount of inspections that you can do and is that why you are focusing on that risk?

Anyone in public life who is asked, “Would you like more resources?” Will say, “Yes,” but there is a balance to be struck with that.

How is the balance?

With support from the last Government and now from this Government, expanding our water inspection programme to 10,000 a year is a very healthy level of inspection activity around the country. Six-thousand farm inspections is also a healthy level of work. We are increasing our work on COMAH, which is the Control of Major Accident Hazards under the Seveso II Directive, the health and safety regulation we do for the more high-risk sites. We felt that was not quite where it needed to be and have recently increased our fees—it is a fee system—to cover those costs. There are some areas where we are doing more than we were doing previously to mitigate some risks.

Just a last question. There has been some criticism of the EA for being reluctant to publish inspections data and maybe opaquer and slower to respond to FOIs. What is the reason for this and is it being tackled? There have been some reports that employees have been frightened about publishing this data. How are you tackling those kinds of problems?

In my first month in this job, I got a letter from the Information Commissioner’s Office threatening enforcement for failure to meet FOIs. The agency gets more FOIs than the entirety of the rest of Whitehall, 50,000 a year. We put a huge turnaround plan in and are now meeting our FOI standards. No one in the EA should be frightened of releasing material; they should release it. But we can do more. The next step for us is publishing all our inspection reports or CAR forms. We started with some waste sites, now we are doing the water inspections. We think that environmental protection is a team effort and it is very helpful for Members of Parliament and others in local government to see the condition of the assets behind the barbed wire fence and understand what we are looking at in the local area. We have mapped that through our Water Data Explorer so you can see that. That enables citizens, NGOs and water companies themselves to get a really crisp view of performance across the piece. We are going to carry on publishing those reports. We are going to get more transparent than we have previously. That has not been uncontroversial with some sectors, but it is the right thing to do. One last thing is that we cannot turn around the reality if the numbers are not reliable. We made an important announcement recently about pollution instant reporting in the water industry to make sure that the water industry was not, in a sense, marking its own homework, and making sure that we were clear on the level of pollution, so the pollution statistics we are using for performance reviews, for the new regulator and for scrutiny—like today—are accurate and defensible. That was not always the case. We have also put a lot of money—with support from DEFRA and Ofwat—into continuous monitoring—particularly of water assets—that will give us a much clearer, accurate and timely picture of pollution around the country. That is really important because the public will have confidence in what we are saying about the state of the water environment, and they need that data to rebuild that confidence.

I recognise that there is real financial and operational pressures facing the Environment Agency, but I am deeply concerned about the approach being taken regarding the withdrawal of main river maintenance funding. I appreciate that it is very difficult, but the process that is being taken around this—particularly the retrospective notification of that and the absence of a structured consultation on that process—is deeply concerning and has really heightened the anxieties for my constituents in Glastonbury, Somerton and across Somerset, who are obviously so terribly affected after the catastrophic floods in 2013 and 2014. Alongside the Somerset Drainage Boards Consortium and other stakeholders in Somerset, we are calling for a review of that process, and actually a pause, particularly given the operational risk, as I said, and the clear environmental sensitivities that go alongside that. I have had hundreds of correspondences about this from really worried landowners and homeowners. Could the Environment Agency consider reversing the decision and working with me and Somerset Drainage Boards Consortium to find a proper resolution to this, given that we are coming into winter and Somerset is right at the forefront of flooding?

If I may start by saying that the recent communication from us on main river did not represent—I want to repeat that; it did not represent—a change in our maintenance practices across the Somerset levels. What we were trying to do is make sure everyone was clear about what had been the historic practice in recent years; not just this year or last year, but for many years.

Can you clarify how many years?

I cannot clarify that for you, but I am very happy to write to you. What has actually happened is, as you say, although the Government are funding flood defences very generously—in fact, the numbers show there is a 5% increase year on year in flood defencing, which in the context of the wider fiscal situation is a very generous settlement—there is not enough money to do everything that everyone would like to do in all areas. The way the process works—it is not a process that we create; it is a statutory process—is that we draw up programmes of work and consult widely, including with the regional flood and coastal committees. That is an obligation on us; it is not optional, they must be consulted on those areas, and we have to prioritise our funding based upon the risk to homes, lives and businesses. There is a very difficult process because often it means that there are impacts, particularly for farmland. For example, last year in the east of England, we saw very significant levels of flooding across farmland, often caused by breaches in embankments, which had happened because they had not been maintained. But there were low numbers of homes flooded, and the way our current system works is that is how we prioritise our investment. In Somerset in particular, we are very active players. We are spending significant resources every year on pumping and managing the levels. We also have the Bridgwater Tidal Barrier Scheme and are very involved with the Gravity site, so we are not in any way not present in Somerset; we are spending significant resources there every year. We are trying to have a dialogue with both the internal drainage boards and local farmers about the reality that we are not going to be able to deliver the same level of vegetation clearance and maintenance in the embankment system around the levels as we were doing 15 or 20 years ago. That is obviously a very sensitive subject in Somerset; I hear that entirely and understand the concerns of your constituents. I would point out that the Government have increased funding for the IDBs quite considerably. A further £16 million was given to them over this year; that is £91 million total over two years. That is giving them some resource to correct the consequences of the damage to their assets from recent storms, which is a very important part of their work. I am, of course, very happy to meet with you or anyone from the Somerset community to discuss what we can do collectively in those areas, but I cannot sugar the pill that we have some difficult trade-offs to make. In Somerset, we also have villages, homes, businesses and new investment zones. We were mentioning growth; the Gravity site is an area we are very concerned about because of the flood risk to the gigafactory. We have Bridgwater, which we are committed to and need to complete. It is an expensive project that prevents tidal blocking across the levels. So there is a lot going on in Somerset that we have to get right. We do not always get that right; I accept that, but we are moving in quite a careful, planned arrangement to communicate that and discuss what options there are. There are options—including for IDBs—to raise more money locally, which may help, and we are very happy to discuss that with you if that is useful.

I am going to start tracking a bit now for short questions and short answers because we have a lot to get through and we really need to focus our attention. Toby, do you want to pick up the question on resourcing and staffing?

Bringing it back to the topic of resources, which has been raised by two colleagues already: since 2010, the Environment Agency’s overall funding was down by about a third in real terms. Even over that period, flood protection increased in real terms, so the non-flood protection elements were continually squeezed. We have just had a spending review, from which further efficiencies are expected. Can you give us a sense as to what the main things are that you are going to be spending less on and what you anticipate the impact of those reductions will be?

The agency has three sources of money in three different places. We have a pot of money from the Government for flood defence. As I say, that is going up slightly over the period overall, but there is an associated demanding efficiency target because our revenue spending for things like flood warning is in flat cash over the period. That is quite a demanding efficiency we have to deliver and we can come on to how we will do that if that is useful. Our second pot of money is a grant-in-aid for environmental protection. That has gone down very significantly since 2010 and now stands at just over £100 million of our £2.3 billion budget, so a very small element is for that. The last element is our fees and charges, which we have increased considerably by more than £100 million a year over the last three years, and that is what is funding our water inspection programme. The remaining residual bit of environmental protection money is quite important because it pays for things that we cannot obviously charge for. The three I have in mind are, first, things like our monitoring performance, which is vital to give that sense of data accuracy around the Water Framework Directive, and we have not historically done enough of those samples to give people that confidence in what we are doing. Secondly, some waste crime work is grant-funded. We have just seen an increase at the last SR from £10 million to £15 million a year from the Government towards the waste crime prosecutions we were discussing at the start of this meeting. That is very welcome. The third area is really about data and how we translate our science base, and for that we are reliant upon grant funding. As you say, the settlement that DEFRA agreed with the Treasury would imply further reductions of that. They are moderate but would have consequences for us. Our strategy on that is to think about whether there are alternative sources of finance in some areas. Could we ask water companies to contribute towards water monitoring? We think we probably could. We agreed on a change with the Treasury that enables us to defray the cost of our IT on some fees. That is a new thing for us because it is paying for future IT with this year’s fees, which is a bit of a challenging thing to agree. That will help us maintain those areas. Internally in the EA, we have moved money and resources around to protect environmental monitoring in particular because our board and executive team are really worried about the level of environmental monitoring. It is completely critical for environmental progress that we have that really robust database and cuts that would be extremely damaging.

You referred there to increasing charges. Since 2024, you have increased the fees that you charge regulated business to cover costs, in some cases as much as doubling them. Can you give us a sense of what impact you think that has on those organisations and why that was done?

First there is a high demand for additional services from the agency. We mentioned water inspections; that is a big area. I could have mentioned the fact that we are worried about waste exports; that is coming in unfunded projects. When we have these moments where we have demand for new services, we have to work out if the taxpayer or business is paying for it. Often on the polluter-pays principle, we think that it is right that business contributes to all those areas. Secondly, for many larger businesses—we were mentioning permitting earlier—they just want certainty and speed. The cost to them of a delay in their permit and planning application when they have a project to go and building work on is absolutely huge. What we need to be doing as a responsive public sector body is making sure that if I say you will get your permit in six months’ time, you get it in six months’ time. This is completely imperative for the growth agenda. People do not mind paying, but they really object to paying if the service they are getting is just not good enough, and on permitting it has not been.

On that, your accounts show a shortfall between the amount of money you spend on regulatory actions and the amount of income generated. Do you think ultimately you are actually charging too little? Do you envisage that those fees you charge should ultimately be paying for those regulatory actions and is that what people can look forward to?

A key point of our recent agreement at the spending review of the Treasury was that we are going to increase our fees in line with CPI. We had a long period of time with completely frozen fees. This led to the absurd situations where you would have two health and safety inspectors—one from the HSE and one from the Environment Agency—going to an oil refinery or a fertiliser store, and one was charging £250 an hour and one £150 an hour. We have to correct some obvious problems in the system like that. Secondly, with permitting we have put additional resources and moved them elsewhere in the business for recovery. This bow wave post-covid that left us with a backlog needed to be fixed, so that is one reason we have spent more money than we have earned in permitting in the last year. I do not think it is a structural problem but was right in the short term. Thirdly, we are looking at making sure that we calibrate our fees and offer people sensible fees for the work we are doing. To Ms Riddell-Carpenter’s comments, that could mean fewer fees for smaller things and higher fees for bigger things. That would be a proportionate approach.

I will now take you to the issue of staff reward and retention. You were unequivocal earlier when you said civil service pay restraint has been a mistake. Do you anticipate that the Corry review’s proposals for more flexible salaries would help? Is it your view that you should be spending more money to attract staff in certain areas? Is that justifiable in the context of what we have just been talking about in terms of the difficulties that you have financially?

You would only move pay if there were a clear business case; there is not everywhere in the agency, but there is in some places. Last year we had to increase the pay for our environmental lawyers—who were paid significantly less than equivalent lawyers in DEFRA or the wider civil service—because we could not attract any. We have had to bring in additional pay for our nuclear regulators because—as you might imagine in this Committee—nuclear regulation is a very hot topic right now and we cannot retain people who do not pay the market rate. Electricians is one area and civil engineers is another. So we have some areas where we have had to do those things. It has left us with an increasingly complex pay scale. What we agreed with our trade unions at the last pay review was that we would set up working groups to look at things like pay progression for specialisms. That would require a change in payment from the Government; we could not do that off our own back. To be fair on the Government, we saw flexibility from them last year when we went to them and said, “We’ve got particular pinch points; can we move on some of those areas?” They were willing to do that. But if you look across the range of very technical skills we provide, we have a few areas where we are struggling in the market, and that is holding back growth because it is making it harder for us to deliver our services. I could give you a dozen professions where we are struggling.

I do not know what it was that you said about increasing pay but everyone has rushed out of the door behind you; maybe they are all off to apply for your well-paid jobs—I don’t know. But would you therefore say that there are a number of posts that you are struggling to recruit for under the current pay arrangements and that a greater flexibility would help you to be more efficient?

There is a case for clearly defined specialisms where we are struggling with the labour market.

We can move on to questions about enforcement.

I will try to rattle through these. In April last year, you were quite candid in talking about your appetite for risk in terms of enforcement. You said the EA had an issue with legal risk. Philip, I wanted to ask about enforcement undertakings and particularly whether you think that these are sufficient for improving long-term behaviours or more enforcement powers are needed to tackle the low to medium-risk polluters.

The matter is different in water than in everything else. Do you want to start with water?

Yes, let us start with water.

It is worth recalling that when Parliament created the EA in 1995, it did not think it would be doing water enforcement; it thought Ofwat would do the water enforcement. The history here is that we have developed essentially a private prosecution practice because we felt that there were offences that were not being adequately enforced against. That is not in our legislative structure. No-one asked us to do that; we asked ourselves to do it. We felt there was a gap in the market that we filled. Actually, the way in which the Ofwat legislation works—as the Chair said earlier—is much more amenable to doing a deal with a water company to say, “You’ve done something wrong; you now have to pay up and put that thing right. There’s nothing we can do.” That is a reason why—in the context of the Cunliffe review—joining up the enforcement end-to-end is really important. Prior to the Water (Special Measures) Act 2025, the EA really only had two options: a strongly worded letter or a criminal prosecution. That is not a very good range of civil options. We now have more. We have the possibility of doing civil penalties. That is just coming in; the Government consulted on that this week, which we really welcome. These would be civil test variable monetary penalties, which would help. We also have enforcement undertakings. On water, what we said with EUs is they are designed for a situation where a company wants to do the right thing and put the environmental offending right, it commits to not doing it again and wishes to pay into a local environmental charity to put that right. To avoid a complex and expensive court case—which could cost the agency into six figures in terms of taking a criminal prosecution—where we get money into The Rivers Trust or a local community group quickly and the company genuinely is remorseful, that is a good way of resolving some offending we have seen in the water industry. We have written to all the companies to say, “Bring out some of these historic cases and let’s resolve them. Let’s try and clear the decks.” We have 477 live cases against the water industry. There is a problem with that though, which is that in some cases the water company has not put right the offending, therefore we are questioning whether this is the right model. In some cases, the offending is so grave, brazen, prolonged and irresponsible that we feel it would be amiss not to take it to criminal prosecution. So there are limits to where an enforcement undertaking would work. I will make one more comment in case there are any water company chief executives listening to this. An enforcement undertaking has to be a credible number, a credible contribution towards a local charity. It cannot be tuppence ha’penny offered on the steps of the court. I have had cases of water companies offering to settle by an enforcement undertaking when they have already pled guilty at the court; obviously, the answer to that is going to be a firm no. So there is a space for it, but it is not everywhere. We have a particular company that represents a very large part of our offending. I will not say which one it is. In that case, we are struggling to get those undertakings out of that company, so we have a bit of a question about whether this is working as fully as it might.

Have you used your new power to impose unlimited fines?

It only came in recently. There are actually two cases currently going through our system, but because they are appealing we cannot tell you what they are, but we are using it.

Do you think that will have an impact on compliance?

We are not in a good place when the agency finds that a quarter of the inspections lead to noncompliance. That is a remarkable number. Let us think about another domain of regulation where we would find that. Would you get on an aeroplane where a quarter of the aeroplanes were noncompliant? You would not. So we have some way to go on here. This is why joining up what we and Ofwat do is essential because Ofwat carries the bigger stick. It is very important that in the future regime post-Cunliffe, things like the findings of our inspections feed into the regulatory regime that the new regulator will operate. That is key to pulling this into compliance.

You mentioned the government-proposed changes in respect of automatic fines and lowering the standard of proof. Do you think there is a danger of overreach when more inspections of monitoring may actually be more of a deterrent?

The IWC makes clear there is a risk of what they call the death spiral, where you have a company that is so noncompliant and not meeting its obligations that it is being fined and fined and fined again. That extracts value from the company, which cannot fund the turnaround of its sales. We accept there is a problem there. For some companies, you may need some sort of regime to stabilise them and help turn them around, which may require some form of legally obligated forbearance from regulators, so there may be a factor there. We start with an expectation that the water industry fully complies with all its legal obligations; it is not an unreasonable starting point, therefore we do not expect to be using a lot of these penalties. Some expectations are things like making sure they have event duration monitoring that is working, report pollution in a timely fashion, do not obstruct our offices and go about their business. These do not feel like particularly outrageous demands for regulators to make, so we are hopeful we will not get too much enforcement from them.

Finally, are you sympathetic to that argument in respect of the doom loop that water companies get themselves into?

Sympathetic would imply I was happy with the outcome and I am very much not.

From a performance point of view in terms of investment in that infrastructure, if a water company is saying, “Look, you’re fining us, we get caught in the cycle,” what is your view as an agency on that argument?

For some companies, the situation they have got themselves into is terrible for them, the environment, their billpayers and communities. But the question is not that; the question is how we turn it around. Higher bills will help, but in some cases it may not be enough, so we look at that like everyone else does and ask what kind of solution can you come up with.

Do you think that more stringent enforcement and unlimited fines actually hinder that process rather than help it?

In some companies where we have seen such significant day-on-day failure, it might. That is unusual across the sector of course; many companies do not have that level of enforcement problem.

Because we were not managing this case; it was being managed by the local authority, which can happen. We were in liaison with the authority, which was looking at various options. It subsequently became apparent that the offending was much more serious than the authority had thought because as you say, there was significant further traffic. We had intelligence reports. Once that was brought to our attention, we actually moved quite swiftly to get an exclusion order at Hoad’s Wood and we would if we had credible reports of anywhere else in Kent. As you know, we are now remediating the Hoad’s Wood site under a ministerial direction. I am not going to comment very much on the investigation. It is safe to say that it is very serious offending at the very top end. We are working closely with Kent County Council and Kent Police and the ROCU is on that investigation.

Yes, it was. It was about five months from recollection, but I can check.

No, that is not a fair characterisation. At the time the first reports came in, it was not regarded as a systematic, industrial-level operation by Ashford. There was no terms for that. When that just became true, we then moved quite quickly on it. The story has been slightly rewritten in a way I do not think I would recognise.

We were aware about six months before we issued the exclusion order via Ashford Council.

Yes.

I do not know but I can find out. I would imagine we would have done some visits early on. When it became apparent that it was a much more serious issue, we were obviously present a lot and have been ever since.

I do not think it is that strange. I can add a bit of context. I said earlier that we are not happy with the overall level of waste crime. Hoad’s Wood is particularly offensive because it is such a beautiful site. It is a bluebell wood and is SSSI, so it is one of the most remarkable bits of serious offending I can think of around the country. We have many other sites. We also see industrial levels of this sort of abuse. We need good intelligence to take action on it, and if we get that intelligence we act quite quickly. It is difficult in the legal order because we have to maintain the closure of the site and show that it is proportionate to exclude someone from their own land. It is a very difficult bar for us to get to. There is a question in my mind about two things. One is about intelligence flows. This initial report that went to Ashford Borough Council was inaccurate; it could have been better. Could we have seen more threat there than we did? We originally had public reports that there was waste being dumped in the area.

As I say, I will pick that point up and let you know what visits were made on that site.

I am very happy to work with you on that.

I have seen it; we have been doing a lot of work on that. The House of Lords also made the point—which is relevant—that there are other sites around the country of a similar scale of offending. They are often not in SSSIs but industrial or brownfield land. We have a real issue there. We are doing a couple of things to try to improve our response. One that is very relevant at Hoad’s Wood is that organised criminals will pay drivers—who must know they are doing something illegal—to drive the waste into the sites. We want to bring in something that we see in constabularies, which is basically civil penalties for those drivers. So if we find a driver driving to a site that is clearly an unauthorised waste site, they will be fined because we want to make it harder for the organised criminal gang to acquire a network that can facilitate this waste transition. They did not do it all on their own; they would have got that waste from multiple other areas. That is a really important point. Secondly, we have a real legal risk of sustaining the closure of sites around the country. We have to go back to court every six months to ask for a renewal of our order that excludes the site. We have to demonstrate at that point that if we lifted the order there would be more waste brought in. That is a very high bar for us to meet. We have seen sites around the country where we issued an exclusion order, held it for a bit, then lost the subsequent court order renewal and the waste criminals came back. That is something that worries me a lot and it is very frustrating for communities.

We do put cameras on sites. We have a whole range of takes we can do to monitor and look at those areas. The difficulty we have of course is that what you see with this is people will be essentially paying people to do helper activities around the site. So the criminal behind the overall enterprise will be basically bribing people to drive their waste onto this site, and we need to make that harder for them as well as go after the criminals themselves who are getting the big money from this.

This is big business and a serious crime. You offer a civil enforcement notice or some sort of civil penalty to a lorry driver thought to be the working definition of low-hanging fruit. How much is that?

A maximum of £300, but to be clear that is not the response, Chair.

Three hundred pounds in a business that is going to be generating hundreds of thousands in profit.

You are completely right. In a recent case we had a gang who we think had made about £80 million from waste crime in the north west. The right approach for the organised criminals behind this—who as you say are making very significant sums of money—is to go after their assets. We also secure significant prison sentences against these gangs but many of them regard that as an occupational hazard and not something that would stop them doing the activity because the reward is so great. We have to be better at seizing assets and look at things like travel bans. I am very pleased we have started doing POCA seizures; that is an important part of this. Going after the proceeds of this crime and making it uneconomic would turn around the issues. The fines are merely to make it a bit more expensive and difficult for them. It is not the same as going after them properly, which is about going after their assets and prosecuting them.

I am hearing an awful lot of process here but the outcomes still seem to be exceptionally poor. What is the point of having a designation of a site of special scientific interest if it takes six months to lock a gate?

It did not take six months. Let me just correct you on that point.

How did it work then?

Once we knew that there was serious offending at the site, we worked very quickly to get the exclusion order; I want to be very clear on that.

At that time, we were not aware that it was so serious that it would be beyond Ashford Borough Council and that it would be for the EA.

Because you had not sent people down to look at it.

We do not know but I will find out. I do not know what the case is about the visits.

Either you had not sent them down or you did send them down and they did not see it.

I do not know the answer to that question but we can find that out.

I do not know the date on which the inspectors first went to the site. Maybe I should know but I do not. I am happy to look at it.

We need to move on. Sarah, you have some questions around regulating the agricultural sector.

We also know that agriculture is a leading cause of water pollution but understand that this is a particularly complex area for farmers because there are lots of regulations: over 150 pieces. At the outset, you touched on the fact that the Environment Agency takes this advice-led approach, it is with dedicated teams and you have action plans and videos. It sounds like a perfect situation. Equally the previous Government launched their investigation into the interaction between farmers and regulators and they actually feel that they are treated with suspicion. They have a great fear of letters of enforcement and costs around failed inspections. I am not quite sure if the relationship is as it has been pictured, so I just want to get your honest assessment of how you actually feel the relationship is between the EA and farmers and whether you recognise their fears.

In general, our relationship with the agricultural sector is much improved. There is no doubt that there are some folk who would like us to be doing more and there are particularly those who are subject to flooding of their land. We recognise that as a challenge but our flooding priorities are rightly on homes and people, and we therefore acknowledge the resources that are available for flooding of agricultural land are not all that we would like. There are a few folk who are in that category, which I completely get. On the other hand, the positives are that we engage regularly with the NFU, CLA and tenant farming associations. I can give you a nice example of working with farmers in Dorset on the Poole catchment trying to improve the quality of Poole Harbour. We have been working closely with a group of 160 farmers there to help them reduce the nutrient load that is doing damage to the harbour. We have developed a tool there that we hope we will be able to spread out across the rest of the sector, which will of course save them money as well as help the environment because in many cases they are applying more nutrients than the land can bear. The advice regulation is an important point. We work closely with farmers on catchment-sensitive farming grants and onsite reservoirs and help them to secure cash for improved slurry conditions in particular. We are working on engagement projects funded by DEFRA through Project TARA—Testing Approaches to Regulation for Agriculture—again so as to improve the relationships. We put out our first-ever regulatory guidebook for farmers last year called “Harvesting Success”. That has gone down very well in the industry. With some exceptions related to flooding, you will generally find that the farmers respect what we are doing and appreciate the fact that it is advice-led. Let me just tell you we need to be tough as well. Philip mentioned earlier about 20% of water company inspections having issues, whereas in farming last year, 49% of farms that we inspected had an issue that needed to be put right. Happily it is a bit lower this year and we are hoping that that is a step in the right direction. There is a lot of stick and carrot here, but in general we have worked very hard on the nature of those inspections. We train people up carefully. As Philip said earlier, we hire people who are familiar with the agricultural sector. Generally, considering this is an industry that we are regulating, the relationship is properly professional and in reasonable shape.

On that point, as you just flagged, in ’23-’24 the report said 42% of farms that were inspected were noncompliant. That would perhaps suggest that this advice-led approach is not working.

I do not think that is right. As I said earlier, we have selected those that we are visiting. It would be wrong to run away with the impression that 42% of the 100,000 were noncompliant. This is not done at random. We have put in improvement measures in all those. As the chief executive said earlier, in many cases the issues are twofold: one, not soil testing and two, not having a nutrient management plan, both of which are things they should be doing, but they are not actually pollution incidents.

What do you do to follow up on that where the farm is noncompliant? What process do you have?

We shall be visiting and inspecting again subsequently. We keep a close record of where the improvements have been completed and shall be following those up. In due course, that is where we will tend to prosecute if need be.

Just to give you a sense of the numbers. Last year, out of 4,545 inspections, 2,211 were noncompliant in various forms and 6,870 actions were issued. Of those actions, 6,242 have been completed by the farm and we have verified that. We issued 863 warnings and two prosecutions. That gives you a sense of how this advice-led system is operating in practice.

You very proudly stated that the actual number of inspections is going from about 3,000 up to 6,000.

Five or six thousand.

It was 400 two years ago, so it has increased.

But as you also identified, there are over 105,000 farms, so is this really enough and what more can you do? Because resources are tight and if you are having to go back and do these reinspections as well, are you actually going to be able to do more?

We believe that we are covering the ground in this space reasonably well. We have talked to DEFRA about one or two things that we think would make a difference. One is the imposition of environmental permitting regulations on the dairy and beef sector because a large proportion of the pollution incidents come from dairy and beef. I hope that it will be accepting that advice because that would make a difference. Where we permit—which is in the intensive pig and poultry sectors—there are a tiny number of noncompliances to pollution incidents last year. That would make a big difference.

Some questions are coming on to that further so I will leave that for the moment. You also mentioned sludge. I just wanted to ask you about how you assess pollution risks from sludge and do you think reform is needed?

We think reform is needed. We are currently regulating sludge under a 1989 set of regulations, Sludge (Use in Agriculture) Regulations, SUAR. They list a small number—11 in total, I think—of pollutants, mainly heavy metals like cadmium, and that is not a modernised regulatory system. We also cannot charge for it so we have no income stream to do sludge regulatory work. What can we do about that? DEFRA has agreed that we will incorporate sludge use into the Farming Rules for Water. That is really important because if we want a circular economy, sludge is actually a viable, valuable bio-resource, particularly in the east of England, which is short in nitrogen and in some places phosphorus. We do not want to be too pre-emptive about that; we want to make sure there is good, successful management of sludges. We also want to make sure that they are applied to land at the right time in the right field, and that is why the link to Farming Rules for Water is really important. Our inspection programme could help us improve our work on that. We are also very keen to make sure the industry is testing its sludges properly. We are actually doing a good job on making sure there is no mishandling of aqueous wastes into wastewater implants where sludges are being produced because that would have impacts for the food chain, PFAS and so on. There is quite a lot we can do on sludge and we should make progress. The current situation is not satisfactory.

That is another area where environmental permitting regulations would help. We would like to see sludge brought within them and that would be an elements that would help. Water companies are working hard on this. Let us not underestimate this; it is a serious problem that is well recognised by all. It is a problem in two ways: one is chemicals—PFAS type—which would also have potential for human health challenge, and secondly the pollution elements affecting the land and water. There is a lot to be done on this. Water companies are on the case. They have set up a Biosolids Assurance Scheme, which we are seeking to approve and that would make a significant difference. There is also a lot of technology going into the treatment of waste, particularly after anaerobic digestion, in some cases producing some pellets that can be put on the land, and that deals with the problem. There is a lot going on but we would not want to underestimate this as a challenge at the moment. You are quite right to draw on it.

There have been regular reports of environmental breaches in livestock facilities, particularly in the dairy sector. We know this is not just an issue in England alone. As a Committee, we recently visited Brussels and were speaking to an MEP from Ireland who sits on the Committee for Agriculture, Environment and Rural Affairs. They were telling us that nitrate pollution in watercourses that is linked specifically to dairy farming is something that they are seeking an extended exemption on from the European Commission. In our part of the world, what challenges have you faced in making sure the livestock farming sector is compliant?

We have covered these points. We know it is a challenge that we need to be getting closer to; that is why we think it should be within the Environmental Permitting (England and Wales) Regulations 1996. We know there is some cost attached to it and encourage the availability of grants under ELMS for improvements in slurry storage. We have made some progress on that but more needs to be done.

Just on river water pollution specifically, River Action has accused the EA of neglecting its responsibilities in this area, particularly relating to industrial-scale livestock facilities, in particular poultry units. The River Wye has been cited as a prominent example of this but is obviously not the only one. How do you respond to that claim?

The situation on the Wye—not just the Wye but other watercourses in the west of England—is really about inappropriate spreading of chicken manure to land and inappropriate planting, particularly of potatoes without cover crop, which causes run-off of soils into rivers particularly during spring and late winter rain. It is not necessarily a problem with the regulation of poultry per se, but it is the use of the manure that worries us. We are first trying to make sure that farmers comply with their obligation to have cover crops. We are currently using drones to check that they have them. They had to put cover crop on by last week so we are looking at that. Secondly, we are making sure that people are not spreading chicken manure to land that is not needed, because actually quite often they have very high levels of nitrogen and phosphorus in their soils and do not need to put those chicken manures. We are also talking to the industry about how it can dewater chicken manures, pelletise it, as the Chair said, and move it to other catchments; that is an important element of this. We are also very keen to work with the Government and our colleagues at Natural England on things like planting buffer strips along the watercourses that can absorb nutrients and create runoff; that is very important. Fundamentally, there are some real economic challenges. Because we listen to farmers and work with them all the time, we understand that for many farmers, growing potatoes is the highest-yielding crop they can get in those areas. Particularly for dairy, the milk price is often not high enough to justify the cost of what they would have to do, so we are making sure that we have understood the economics behind that as well as just going with an enforcement approach.

One other thing if I may, the supply chain is a very important part of this, and Avara—to its credit—is trying to do something on the Wye. We need to encourage others to do that. In some ways, it has the best opportunity to implement agricultural behaviour and is a very important part of it.

The other side of the coin is overly burdensome regulation standing in the way of positive investment. Last year I visited a large egg farm in Shropshire. The owner told us they had invested more than £1 million in an on-site incinerator for muck and carcasses, but despite initial assurances, the EA refused a permit for carcasses so they still have to be transported off the farm. This obviously massively increases the farm’s costs, not to say anything of the environmental and biosecurity impacts. Obviously I would not expect you to be able to comment on individual cases, but can you understand why many in the farming sector feel at the moment that on one hand you are not doing enough about pollution pouring into rivers, and yet when they are trying to do the right thing as they see it with incinerators or on-site water treatment, you are throwing the book at them?

I will certainly be happy to look at the specific but you also get the difficult balance that we are facing between our two objectives in this field. It is not an easy space to be in but we will certainly take a look at that specific.

A lot of our caseload and complaints we get from members of the House are really about poor management of protein management, farm waste, incinerators, air quality, insect and ventilation problems, and making sure waste and funding is appropriate. You will understand that we have quite a lot of regulatory requirements for both dairy farms and carcass processing and we do that to protect constituents of yours who may be facing pollution or other forms of risk from those installations. That is an important part of our role.

Do you understand the point that it is very likely those carcasses are being disposed of in the same way but it is just they are having to travel off farm?

We cannot comment on that case but the main issue here is whether they are being disposed of in a way that is fully compliant and does not cause air quality problems or problems for local residents. That is the test we have to apply.

Just on the scope of permitting regulations—which we touched on earlier—do you think that lowering the threshold of bringing more medium-sized businesses into scope would help tackle some issues we are seeing on units or do you think the threshold is right as it is?

We are talking intensive pig and poultry; we would like to see some reduction in that but to be honest, that is not as important as getting dairy and beef within the EPR regime in the first place.

Earlier, you highlighted the figure of 25% of water company inspections being noncompliant. It has been reported that 69% of inspected English dairy farms were breaking environmental regulations in 2020-21. As you said, that led the previous Government to say they would like to bring intensive beef and dairy farming into the EPR but we have heard very little since. Alan, you said that is still the EA’s stance but why do you think so little progress has been made on that?

Because of respect for the agricultural community and not wanting to impose what would be a modest extra cost on it; we recognise that. But in this case, dairy and beef represent such a large proportion of the incidents in agriculture that it is the right step to take.

On the issue of burdens versus compliance, do you not think you have a greater role to play in advice and spreading best practice? Is that not a role that you could do more of?

There is never a question that we are primarily advice-led on this. We have worked hard with dairy and beef producers. I am afraid it does need a bit more.

No, I would not, but I would point out that after the cuts that Mr Perkins discussed earlier, we ended up with fewer than 100 people across the whole country dedicated to water pollution. Following the uplifting resources under Secretary of State Barclay, that is now more like 500 so we have a much more credible response than we had previously. The EA always wanted to make sure more was done. The source of the problem was that many things we were arguing for in previous price reviews—particularly PR19 and PR14 before that—were not statutorily obligated and were put back by the economic regulator under the Water Framework Directive. We are 15 years late on engaging in some investment needed.

It would but it would also require Government support. Of course if we had seen—as we think should have happened—a big increase in investment in 2014 or even before—2009—water bills would have been higher over that period. That is what should have happened; there is no doubt about that. But it still requires political will; I have been clear about this. Water bills need to be kept within balance and those people who cannot afford them get support, but in general we have not paid enough for our water in this country. Therefore it is quite right and that is the principal reason why our rivers are in the state that they are.

I would certainly agree with that and that is one of the failings of the early days of regulation, which everybody would accept. There is no doubt about that. But the finances are complicated. That does not actually affect the level of spend in the industry and the balance that has with water bills. It is a complicated issue that I will not go into. But I just want to restate that if only water bills had been maintained in line with inflation over the last 15 years and we were paying now just a little more, the position would be completely different.

I agree with that and it is an area that Ofwat acknowledges that it should never have allowed the dividends. There is no doubt about that. It should have been encouraging more spend. Happily we are past that stage now, and there is a prospect of making decent progress as a result of that.

Because it took that long for the water companies to install them from their starting point. It was an expensive thing for them to be doing and they had limited investment capability over that period. It really is the same issue. The EDM process started in 2015. If there had been—

To do the continuous flow monitoring for the next period is £900 million. I cannot quite do the maths but it is thousands per unit.

That figure is what has been agreed with Ofwat as part of the settlement. Remember, we are going to spend £11 billion—including £900 million on monitoring—in the next price review. That is a significant investment. The EA’s estimate of the cost of remediating work flows is over £60 billion between now and 2050. So that is really the issue: it is a very expensive thing to do.

We have just actually completed an exercise on this to publish a position statement stipulating exactly how you calculate it because it is a bit more complicated than many people think. Some systems—for example big urban ones—take a small number of days to drain. A very heavy storm on day one may not clear from the system until day three or four in extreme cases. We also need to have clear metrics about what meteorological evidence is required for those issues. We have done that with the water industry. To be fair on it, the water industry has said, “Unless that’s in permits, we’re going to dispute it legally every time you claim that there’s been one.” There is a problem there. A rare point of difference between us and DEFRA is not having what we would call deemed conditions for dry day spills in these overflow permits, which would say exactly how we would regard a spill as being dry day. We are capable of doing that but have guidance that we send out. We have not asked that question and are currently discussing it with DEFRA.

I think our guides may have been published but I can check.

We are changing it. Going back to 1994—

Congratulations! Successive Governments and regulators—the National Rivers Authority initially—operated what they called the 60/50/40 regime. If a storm overflow was operating 60 times in year one, they would look at it. If it was more than 50 in year two, they would look at it. If it was more than 40 in year three, if it was still there they would investigate it thoroughly and see whether it met this test. That is clearly not adequate because spilling 40 times a year tells you the system does not have enough capacity because that would be almost a weekly event from what should be an unusual event. We are now moving under a thing called the SODRP—the Storm Overflows Discharge Reduction Plan—to a 30/20/10 rule, which means that we do not expect any storm overflows to operate more than 10 times a year. To make that happen, we have to invest serious money and change the permits between now and 2050, which is the target date that the Government set. To do that, we are doing it in slices. The first slice is AMP8. I mentioned the £11 billion number; it is actually £10 billion and a bit plus £900 million of continuous water quality monitoring. We will look at 3,300 of the 14,250 storm overflows in the next five years and repermit those. We have chosen sites either where we have seen significant non-compliance or we see that the overflow is going into bathing or shellfish water and we think those are particular public communities. We are prioritising our effort on those sites. We hope our modelling shows that against a baseline of around 450,000 spills last year we should shave off about 80,000 to 90,000 by 2030 with this first stage of the work. We will then go back to Ofwat we hope, or whoever is the regulator at that point, and ask for the next stage of work in the next price review.

Yes.

The question is are they lawful or unlawful? If there were 60,000 unlawful sewage spills it would be one thing, but we were not able to say they were unlawful. If we have very heavy rain that considerably exceeds the capacity of the licence and permitted infrastructure that Severn Trent was funded to build and there is a spill, that is a lawful spill, not a dry day spill. We may not like that; we may collectively think that is not good enough and want to change it. I have a lot of sympathy for those arguments, but as a regulator we have to abide by the law as it is, not as we would like it to be. If there is not a dry day spill it does not count against them for this performance metric.

There is no doubt that the extraction of large dividends in the relatively early years after privatisation was extremely damaging and that money would have been available for subsequent investment in the industry that was needed.

Just in the early years?

It has been relatively reduced over the last few years.

There is no money left to pay dividends.

The more responsible companies—the three listed companies—are paying responsible dividends and have been all along. They have not been irresponsible about taking dividends out and are now legitimately paying dividends to their shareholders in return for the investment. That is okay. There are very few dividends being taken out by the private companies. Those that had paid excessive dividends in the past are putting right what occurred to some extent. If that money had been left available, yes, the water companies would have had it to invest. The consequence of that would have been that bills would have gone up because they would get reward for the investment. If you ask me what the prime cause of the state of the rivers is—the sewage crisis as you say—it is lack of investment over the last 20 years.

I did not; I answered your question by saying that the dividends in the relatively early years were mostly a prime cause of the problem.

Yes, but that is something that Ofwat looks after; it is not something within our jurisdiction.

I have and some have been excessive, I completely agree.

We are under pressure of time so we will move on. We have some questions now around drought response and water security.

I will try to keep it brief and to time. First on drought and then we will move on to abstractions. What is your reading of the latest situation over the summer and into the months where we are now? What is the assessment that you have made and specifically the effectiveness of water companies, drought plans and their responses?

Our assessment is that we are very concerned. We would expect to see reservoir levels across England heading towards 80% at this point of the year and they are actually at about 55%. We are on track for an average October for rainfall following recent storms. We had a very dry August and September, so we are really concerned. We are particularly concerned in Yorkshire, which is very groundwater dependent, and in southern England in Sussex, which has very low reservoir levels. We are pleased that the water companies enacted their temporary use bans on time. That is difficult for them because it is not necessarily a popular thing to prevent hosepipe use. We are working very closely with the National Drought Group to calibrate the response to make sure people are sustaining those restrictions going into the winter period. We have also issued nearly 50 drought permits with colleagues in DEFRA, more than we have ever done before, and that shows the depth of the challenge. They are not easy things to issue in the sense that of course you want to preserve drinking water and the economic use of water, but we are also essentially lowering river levels to very low levels in many areas. There is a balance to be struck all the time in that work. Looking forward, if we have a winter that is less than 80% of long-term average rainfall, we are going to see continued significant challenges going into next year. We are all looking at that very carefully. That is why we are insisting people maintain their hosepipe bans in many parts of the country despite the fact that it is now raining and they may have to go further in one or two areas.

On that point of the summer, 240 farmers in the Ely Ouse catchment area were subject to an abstraction ban in July that was imposed quite suddenly, with no warning. Lots of campaigners there—the farmers working with bodies such as the NFU—worked really hard and at pace to get some abstractions overturned. It was reduced to 150 in the end. I totally understand the pressures in terms of water and security. There is a need to balance the demands on the water companies versus farming security and food security. What lessons have you learned from that and what would you take into next year from the lessons in Ely?

This is a similar point to the one Mr Jermy was making because it was a similar time. There is a point of learning for our team from the east of England about how they communicated with farmers at that point. They basically snapped back to a previous permit standard called the hands-off permit level. This is an established practice. They assumed the farmers knew what that was but not all of them did and they wanted more consultation. You make a very good point about the balance there; it is a very different one to make. We were recently very roundly criticised for decisions in north-east London, for example, but there we have to balance abstraction. There are people living on canal boats whose boats would be overturned if we took out the water and chalk streams. It is a difficult trade-off to make and we make that every day. We do not always get it right but we try to do it in a legally compliant, environmentally informed way.

When we put out The National Framework for Water Resources 2025 a couple of months ago, we said that every participant in this whole system needs to be playing their part. It requires Government and regulators to do their part and regions preparing joint efforts so that they get a decent view. Water companies need to be doing better. Industry is clearly a big user here and some new industry and new energy are particularly heavy users so there is constraint there. Of course, as we have said a couple of times, we regret not giving sufficient warning. But farmers can see that it has not rained a lot so they need to be proactive as well, and of course there is challenge on consumers to reduce per capita consumption. We have made a little progress on that, down from about 140 litres a day to 136. It needs to go further. It really is a whole-system challenge to deal with what could otherwise be a serious issue over the next 30 years.

I appreciate that. One of the sincerest challenges that I see is Suffolk Coastal, a big agriculture area with a big industry in Sizewell. I see a lot of those pressures that we talk about from water resilience play out daily in Suffolk Coastal. We need to talk about monitoring. I had a farm visit on Friday. The constituency I represent has 150 active farmers through the FWAG scheme who are looking at some amazing innovations, for example the Felixstowe Hydrocycle, trying to get their own reservoirs, funding their own reservoirs and farms, and subterranean reservoirs. There is a huge amount of innovation happening in the east of England in direct response to where abstraction licences are going to go. However, for as long as all those farmers are doing amazing things on innovation and trying to seek their own funding, going for grants and trying to get their own capital in place, there are a hell of a lot of farmers out there who are getting away with abstractions because of a lack of monitoring. It does not incentivise farmers to look to the future, forward plan, go for grants, or put their own capital aside when there is not enough monitoring going on from the EA, and you can basically get away with abstractions under some circumstances.

That is a very good point, and I am worried about us not doing enough on that. We have just launched a prosecution against a water company for over-abstraction. That is unusual; we have not done many of those, which tells us that maybe we should do more of this. To Ms Dollimore’s point, we are very focused on sewage and pollution and maybe should be rebalancing a bit towards an over-abstraction affair to comply. It completely undermines all the excellent work your constituents are doing to be more water-efficient across Suffolk Coastal, so it is a good point and one that we will have to take away.

My final point—it is more of a point than a question—goes back to the amazing innovation happening in the east of England, in Suffolk Coastal, as an example. A lot of farmers have told me that over the last 20 years—since the late ’90s—they have worked very closely with the EA to develop and foster a good working relationship, find those innovations, work together and forward plan for some water security issues that we have. Can I ask you to lean into that more? There are still more things that can be done to make sure there are better relationships between the farming community and water monitoring and abstractions. We are facing a crisis in the east of England where farmers are going to have 100% of their licensing removed and it is such a big, urgent area. Sometimes when the abstraction licences are being pushed back, it is really hard for them to plan their businesses around changing timeframes. It is a plea to lean in more to work with the farming community.

I completely agree with you. I have talked twice already today about areas where an environmental permitting regulation should be extended. Cunliffe in the Independent Water Commission recommended that water abstraction should also be brought within EPR, and we are strong supporters of that.

The final round of questions concerns climate and weather resilience.

Following on from Jenny’s really well-made comment there, the Committee on Climate Change has said that the Government need to set adaptation objectives for 2050 at the latest, and the NAO and the EAC have called for clear resilience standards based on robust data. How are you working with DEFRA to establish standards and the data that is needed to monitor progress?

The big milestone for us here was NaFRA2—our National Flood Risk Assessment 2—because that gives you a forecast using relatively recent—2018—climate projections down to a two-square-metre level. It not only gives the risk of flood but also surface water, groundwater penetration, and the direction and depth of that water, which is very important if you are trying to think about urban form and how you support infrastructure. Just having the model, of course, does not mean that you have then taken action on it, and we are trying to improve the support we give local government and major infrastructure providers—particularly the railways and roads—to make sure they are using NaFRA2 to do their own modelling of some risks they are going to face. We are also very open to setting some sort of benchmark standard for it. That would not be for Government, but we think it would be useful to have some standard for things like, “How often are you flooded and to what degree?” And, how resilient you are to extreme heat and the other aspects of it. A lot of the technical work to do that has been done. It is really a question for Ministers if they want to adopt some sort of national standard in some form for that. At the minute I do not think they want to.

Just on that, will the Environment Agency work with National Highways to model the drainage impacts? Particularly, I am looking at Somerset, with the A303 and other major roads across the area, particularly given the evidence and that the outdated drainage infrastructure is contributing to local flooding incidents in Somerset, as we know. How much of the EA’s £265 million investment in natural flood management has been directed towards measures that reduce flooding from highways? I am thinking of attenuation ponds, for example, in places like Somerset where we have that road runoff. It is an increasing concern for us.

So far, we have not spent that money and we do not have the programme. We have only spent £30 million on pilots. So the answer to that is very little, though there may be some element of it in one of our schemes. We talk to National Highways a lot about the risks it faces, not only from a flood risk but also a pollution risk because we must not forget the inorganic pollution that highways can generate towards watercourses; it can be very damaging. It has a prioritised map of the areas where its most significant overflows intersect with watercourses and is in discussion with its sponsor Department, DFT, about whether it could afford to tackle some water pollution. It is discussing with us how it will prioritise water pollution and where you would provide various forms of passive treatment for some inorganic waste, which you could do. As I say, we now have the data to do the modelling of the flood risk from highways. I do not know how you have found it, but I have found once you start observing the level of surface water risk we are facing as a country and what that means in terms of climate change, everywhere you look in the urban form, you see excessive levels of concrete, huge pavements that do not have any sink areas, and poor planning decisions around the country. We need to do better with that. We have a group called ADEPT—the heads of Highways and Environment in local government—which we are trying to talk to about whether it could improve its practice. We have a website where you can go and get expertise on how to do this. I myself went to see the arrangements in Rotterdam to reduce surface water risk. The technology and the know-how to manage these sorts of issues are out there, but it is not being consistently applied around the country, and that is going to become an increasing political issue.

The Environment Agency said that it would no longer be technically, socially or economically feasible to protect some homes in floodplains or areas at risk of coastal erosion. I have already spoken about my concerns about some withdrawal of the maintenance of the main rivers. Given that local authorities and internal drainage boards often lack the funding to manage main rivers, how will the Environment Agency ensure that communities that are affected by these withdrawal notices are not left unprotected or unclear about who has the responsibility for some maintenance? What does that shift look like in practice as you are looking to support communities that may no longer be protected?

It is very important that I speak clearly here to reassure people who might be listening to this, so forgive me. Under NaFRA2, we have about 3,600 homes that are at risk of coastal erosion. If you live in such a home, you should know about it because there should be a Shoreline Management Plan between the EA and the local authority and we should be working with that community. There are some communities in parts of the country where it is not technically feasible to support the current coastline, and that is because that erosion that goes on is necessary to protect another bit of the coast. If you did not have it in one place, you would have it somewhere else because coasts move. This is not a political question; it is a technical hydrological question. Obviously, anyone is very welcome to scrutinise the underlying evidence base behind that, but we work very transparently with the Government to make sure they understand where those areas are. Inland is a different picture because it is really a matter of the value for money, trade-offs and what the options are for communities. We are very interested in places that are hard to protect and whether we can use natural flood and land management changes to squash the peak flows in certain areas that would reduce some flood risk. We have just had the independent review of property flood resilience by Peter Bonfield with 22 recommendations about how we improve standards, sales and aftercare for property flood resilience. That could be a solution in some areas around the country where we have particular pinch points. In other areas, it is not so much that you could not protect a community; it is that the value for money—the cost of it—would greatly exceed the value of the property. It is easy for me to say that. If you live in a community, it is a place for you; it is where your home, life, family and memories are. I would not ever suggest lightly that we could not do something for a community around the country, but the cold-hearted cost-benefit analysis needs to be done because we will never have enough money to protect everybody.

The 2020 National Flood and Coastal Erosion Risk Management Strategy is well-intentioned, but evidence we have received suggests that there is not enough detail, funding or mechanisms to support the local delivery of adaptation measures. How will the Environment Agency address this gap in support for adaptation at local level?

We are going to do a refresh about it. We have just done a refresh strategy for us on adaptation, which points out a number of shifts that we need to make in our policy. In particular something that I would highlight is that it is not quite right to say this area is in a 3b flood zone so we should not build in it because that area may contain critical infrastructure—electrical supply, transport, medical infrastructure—that actually needs to be protected. That is actually true in parts of Somerset where you have these very low-lying areas that have key roads or bits of infrastructure. That is an important evolution. The next step of that is to get some other public authorities that provide that infrastructure to take this risk more seriously. We have seen contributions towards protection from Network Rail and National Highways. The Department for Education has contributed quite a lot to a number of schemes that have protected critical bits of infrastructure, but it is not enough, actually. We need the whole of Government to start not just assuming it is the EA’s problem, but it is their problem to make sure their infrastructure is viable in these areas. It is also—if I might say so—why we are a bit wary about saying that every time something gets built in a floodplain, it is wrong. It may not be wrong; it might be the right answer for the community with the right protection. That is particularly true for things like energy infrastructure, which has to cross a landform, and that may include crossing very low-lying land.

We are really over time, but you have excited two very brief questions, I am promised, by Helena and Jayne, so very quickly.

We are not at all averse to it. We are capable of doing it and have the lab capacity and people to do it, but it costs us quite a lot of money. While we are on that subject, there is a lot the Government can do to make it cheaper. For example, under the Bathing Waters Directive, we cannot use some citizen science packs. Other people can do it for us. It does not have to be us doing it, and we cannot do that. We have to have a bottle; it has to be shipped to our labs in Exeter and processed in a very certain way. It does not feel to me to be very efficient or modernised, but I am told that is actually in the primary legislation. There is a deal to be done there on improving this monitoring, such as driving down the cost and allowing other people to do monitoring and show those areas. There is so much more we could do—particularly with community groups that value their watercourses—if we get the legal framework right.

We probably want to use more digital methods than physical signs. We have Swimfo, which is our current system.

We have also put QR codes up in many locations. It is called Hello Lamp Post. You can look at it and that will give you direct access to all our online data. We have quite a good offer on those areas. There are questions whether Swimfo could be improved, for example give more detail, have more data on it, and whether you could incorporate more citizen science into that area. We are open to all those things. You are definitely onto something there; it is important.

I just wanted to ask a little about the Shoreline Management Plan because I come from Falmouth, which has four beaches, two of which are treated very differently from the other two in the Shoreline Management Plan, and it is just that recognition that the economic impact of that could be vast to some places. The council is working with a project called Making Space for Sand, which is doing what it can within the boundaries of the Shoreline Management Plan, but of course it cannot do very much. I know you talked a little about that, but with relation to those coastal areas where this is going to have really quite serious, fundamental economic impacts, what more could be done with things like what the council are doing with Making Space for Sand?

I cannot comment on Falmouth, but we should always look at the economic impact in the roundest sense. There are examples around the country of us spending very significant sums of money for economic benefit. A good example would be Dungeness because of the nuclear power station there, where we put in very significant defences recently and we also have the MOD site there. We should not take these plans in the absence of any analysis of the local community. It should be part of that placemaking role that the local authority plays. There are some cases though—I do not think Falmouth is one—where it is not physically possible to protect the coast at its current level. We have to be honest about that where we find those situations. They are rare, but there are some.

Gentlemen, thank you very much indeed. We have exhausted our questions for today, if not yourselves. We appreciate your attendance and engagement. There may be one or two areas where we will want to follow up in correspondence, but we are grateful to you for your attendance here today.