Solway Tweed river basin characterisation

The Solway Tweed RBD covers areas within both Scotland and England. As a result, administrations in both countries have undertaken detailed analysis and have collaborated to produce this report.

While similar approaches have been used, there are some differences in the work undertaken in Scotland and England. This largely reflects the different environmental and regulatory contexts in the two countries. This report presents as consistent a picture of the economics of water use in the Solway Tweed as is possible at present.

Underpinning these different assessments is a broad view of the similarities and differences of the economies north and south of the border. This provides a solid basis for understanding the implications of the different assessments that have been undertaken.

In October 2003 a UK wide steering group was set up to coordinate work on economic analysis for WFD. This group complemented Economic Advisory Stakeholder Groups already established in Scotland and in England.

In Scotland, detailed analysis of water use by industry has been a focus. As part of the economic analysis of water use, detailed work has been done on water use and economic importance for Scotland⁵. Three main pieces of research were commissioned to expand the understanding of the part that water and water services plays in the Scottish economy as follows⁶:

This Economics of Water Use report identified which industries use water and the value that they derive from that use. The very different ways in which water is used and the quantities involved make direct comparisons of these values spurious however they do provide a clear indication of the importance of water for much of the Scottish economy.

The Operation of the Scottish Water Market report examined the legislative and administrative structure of water services provision in Scotland. It addresses the issue of cost recovery of water services and identifies gaps in current knowledge.

The Dynamics of Water Use report looked at the trends and drivers in water using sectors and suggested how they would be most likely to develop in the absence of the WFD. This provides a baseline that identifies how the pressures on Scotland’s water are most likely to change.

Also, information gathered on pressures has been integrated with the economic analysis, and a picture of the likely complexity of the situation in Scotland regarding multiple pressures has been produced.

Some members of the Scottish Economic Advisory Stakeholder Group have also produced sector reports that can be found on the SEPA website.⁷

In England and Wales, three scoping studies were commissioned in 2003-04 to provide input to this report and further requirements under the WFD.⁸ These reports are:

The Economic Importance and Dynamics of Use report has provided information on the economic importance of water uses and their dynamics for this report. This report includes a comprehensive review of data sources relevant to the economic analysis of water use, profiles of the main sectors associated with pressures in water bodies and contextual information supplied by a number of interested stakeholder groups in the form of Stakeholder templates.

Economic forecasts for the most important activities related to water uses have been produced by Experian Business Strategies Limited, based on output and employment information from the Office of National Statistics (ONS). Full forecasts for the Solway Tweed river basin district are provided in Annex 2. Further information related relevant trends in the Agriculture sector has been provided in a study undertaken by the Environment Agency.

Information related to the Recovery of the Costs of Water Services has been taken from the report on Cost Recovery and Incentive Pricing⁹ with updated information provided by Ofwat and the Environment Agency following the Final Determination of Water Prices for the period 2005 to 2010 for the water companies operating in the English part of the RBD.

Information relevant to the analysis of the cost-effectiveness of actions to be taken within the programmes of measures within river basin management plans has been taken from the report entitled Cost-Effectiveness Analysis and Developing a Methodology to Assess Disproportionate Costs¹⁰. This has been supplemented with a review of progress in implementing the collaborative research programme on RBMP Economics.

Overseeing these reports and the collaborative research programme in England and Wales has been the Economic Advisory Stakeholder Group (England and Wales). In Scotland, the Scottish Economic Advisory Stakeholder Group has also provided valuable assistance and direction. For the United Kingdom as a whole, the UK Economics Steering Group for the Water Framework Directive has overseen the work behind the production of this report and will take forward and guide the work of the Collaborative Research Programme.

Together the Economic Stakeholder Group (ESG) and the Scottish Advisory Stakeholder Group (EASG) and England and Wales group have guided the analysis in Scotland and England. This has been an important collaborative effort resulting in an integrated economic analysis for the Solway Tweed RBD. However, the work also reflects differences in approach, North and South of the border as reflected in the relatively greater focus on linking pressures in water bodies with economic activities in Scotland, while in England, there has been more emphasis on analysing the level of cost recovery.