In early 2008 Ofwat (the government watchdog for the water industry) and the Consumer Council for Water convinced four water companies to change the basis of charging for the processing of rain water. Non domestic properties would now be charged on the size of their site area instead of the rateable value of the property. Churches, charities and clubs, which often had a zero rateable value, suddenly found themselves on the same scales as large multimillion pound companies. Bills went from virtually nothing to £100 million a year.

The change was introduced without consultation or consideration of its effects. Some charities may be forced to close, affecting many vulnerable and elderly people and communities.

The burden has therefore been shifted from users with high rateable values and low areas, such as high street retailers, to organisations with low rateable values and high surface areas. Half of the charge relates to the collection of water from the general highways i.e. nothing to do with premises.

This therefore puts us in the same category as businesses, but they are able to pass on costs to their customers and are more easily able to reduce other costs. In 2000, the government itself said that it would be inappropriate to charge all non-household customers as if they were businesses.

How the drain charges were introduced

The current framework for water and drainage services was largely established by the Water Industry Acts of 1991, 1999 and 2003.  The 1991 Act sets out the structures for the delivery and supervision of water supply and sewerage services; the powers and duties of the Secretary of State, the Water Services Regulation Authority (Ofwat), and the water and sewerage undertakers (the water companies), and relationships between them.  The 1999 Act makes additional provisions, amending the 1991 Act with the intention of giving many water consumers new rights, particularly household customers, and increasing choice.

Who is to blame?

The Water Industry Acts (1991, 1999, 2003) imposes a range of general duties on the Secretary of State (currently, Hilary Benn at Defra), Ofwat and the water companies.  The Secretary of State is required to make regulations to cover those matters with which charging schemes must comply, and also issue  guidance which sets out those matters which Ofwat must have regard to in exercising its functions. 

The guidance published by the Secretary of State (of the Environment) in 2000 encouraged metering for water supplies, and stable, predictable, transparent and customer-focused charging, in line with use made of the three sewerage services offered (foul water, surface water and highways drainage).  Rebates were suggested for those who do not benefit from a particular service.

The guidance stated that it would inappropriate to charge all non-household customers, such as places of worship, community sports facilities, charities and voluntary bodies,  as if they were businesses. The principle recommended was that those making similar demands should be charged on the same basis.  Sewerage services, especially surface water charges, should be based on use, but also reflect the fact that large areas of certain sites may not drain into a public sewer.  Large changes in charges should be phased to prevent significant increases, and introduced in a sensitive way following consultation with customers.

Is it fair?

Under the new regimes, surface water drainage charges are based on the non-permeable areas (buildings and car parks or hard standings), on the argument that this is said more fairly to reflect the relative use of the public drains.  Site area is also used to assess the indirect contribution towards global cost of providing for drainage of the public highways within a particular water companies’ region, though with no potential for reduction.

No distinction is made between types of non-permeable area; a large church is treated the same as, for example, as a large multi-storey car park. And somewhere in a rural setting would be charged the same as a place of the same site area in a busy urban location.  Access to public roads or possession of a car park is not a pre-condition of charging.

The hugely increased costs of the new arrangements for churches have been exacerbated in the short term by the way that some water companies have dealt with their own lack of comprehensive information on surface drainage areas.  They have issued bills on the basis that the total surface area of properties is non-permeable. This has meant that some churches have been assessed for charges 5-10 times higher than they should be as permeable areas such as churchyards have been included in the assessment.  In some cases charges have been made where none are due, because the church has no connection with the public drains. 

The companies’ approach has been to place the onus on the customer to challenge the assessment made, employing the services a qualified professional, such as an architect or a surveyor, if necessary.  In all cases the revised charging begins immediately and continues unless and until a customer can prove the assessment wrong. By perseverance it has in places been possible to secure more accurate bills. Even so, these represent an increased burden compared with the old system. 

Charging bands below

Background

info@dontdrainus.org

Hotline 0709 2847134

Sign the Downing Street petition here

St Ann’s Hospice, in Greater Manchester, recently identified that the new charges would pay for ten days worth of care to dying patients.

What the drain will cost

The ‘rain tax’ is expected to cost the Church of England over £15 million a year, plus a further £10 million as churches employ professional services to appeal the initial bills. This is equivalent to the Church of England being permanently drained of the resources to employ 375 clergy (a loss of 10 clergy in every diocese), or being unable to support 3,000 community groups, or 7,500 pensioner lunch clubs, or the loss of 357 Church School teachers*. Larger churches will see their bills rise from £140 to £8,000 and Cathedrals will pay between £5,000 and £71,000 a year.

The Scouts Association estimates the total drain from the pockets of children into the pockets of water companies to be around £1.5 million.

Many small voluntary sports clubs are reporting similar increases to church bills, ranging from 100 to 1,400%, in the United Utilities region.

The total annual cost to the not for profit sector of churches, charities and clubs is believed by many to be over £100 million a year.