In January 2019 the government consulted on how to improve their management of water in the environment. As part of the consultation they proposed changes to reform water abstraction licensing. In particular, they proposed changes to the conditions under which the Environment Agency (EA) could amend licences to secure good ecological status for water bodies without paying compensation to the licence holder. Currently, the EA has the power to revoke a licence after four years of non-use without compensation but the consultation proposed to extend these powers further.
Two of the questions posed in the consultation are of particular relevance to this article. Question 12 asked whether consultees agreed that the EA ‘should be able to vary or revoke any licence that is causing unsustainable abstraction without paying compensation’. Question 15 then asked whether consultees agreed that the EA should ‘also be able to vary underused licences where there is unmet need for additional water in the catchment, to remove the underused portion’.
In July 2019 the government published their response to the January consultation. This document sets out the measures which the government expects to implement and can be found here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/
attachment_data/file/819372/floods-water-consult-sum-resp.pdf
In broad terms the agricultural/food sector opposed the proposals set out in questions 12 and 15 of the consultation, whereas environment/river groups, individual respondents and local government agreed with them.
Following the responses to the consultation, the government has decided to bring forward its proposals on amending water abstraction licences and allow the EA to amend licences for environmental reasons, or if the licence is underused. However, this power will only be available in relation to licences that are varied or revoked on or after 1 January 2028.
In addition, S25(4A) of the Water Act 2003 gives the Secretary of State the ability to assess the needs of a licence and vary it as they see fit. These actions can now take place without the right to compensation for the reduction in the licence. And those licence holders who are underusing their licences can have their licences adjusted without the right to compensation.