The nature and value of 'must do' activities
Actors and drivers for action
Key things to know
The ecosystem of actors related to the challenge of enabling Water Smart Communities is large and complex.
Due to the unique nature of water services, in particular their critical role in public health and safety, it is important that duties, liabilities and risks are aligned to those with capability and capacity to address them. This is particularly relevant for the supply of water services; there is potentially more flexibility for the supply of sewerage, drainage and flood risk services.
Core obligations can be delivered in a way that maximise wider value creation, though in general this remain optional in certain cases wider outcomes are being mandated through new regulations and primary legislation.
This article highlight the significance of ‘must do’ obligations and how they motivate action.
1. Mapping the ecosystem of actors
Figure 1 presents a simplified overview of this stakeholder ecosystem. The diagram draws on analysis undertaken with project partners and wider stakeholders during a workshop Living Well in Water Smart Communities workshop facilitated by University of Manchester and University of East Anglia March 2023.
The ecosystem of actors related to Enabling Water Smart Communities (EWSC) is expansive and complex. It ranges from individual customers and citizens through water companies, local authorities, developers, designers and contractors, to regulators policy makers, activists and influencers. Any stakeholder mapping linked to a project like EWSC will quickly identify these actors and potentially more. It is important to move beyond a simple mapping to unpack their specific interest and agency in relation to the EWSC challenge and in particular their roles in delivery and stewardship of water smart assets.
Figure 1 / Enabling Water Smart Communities: unpacking the ecosystem of actors (Source:Arup).
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Various observations can be drawn out from the initial mapping exercise:
Many actors are in fact connected to and influenced by water systems. The number of actors that are currently aware of this and actively engaged with water as a challenge is more limited. These are areas of potential impact and an opportunity to extend advocacy and influence and potentially create new roles and responsibilities.
Recent years have seen issues such as flooding, CSO spills, bathing water quality, nutrient neutrality and the governance of water companies moving up the agenda with significant media interest [Article F.01]. As a result, a growing number of actors have moved from a passive position to actively engage with water-related issues. Examples include environmental NGOs, activists, industry bodies, developers and even policy makers as they become more aware of water-related challenges. [Article F.02]
The network of actors with a direct enabling role in delivery and stewardship of water smart communities is smaller. This includes government departments such as the DEFRA and MHCLG, regulatory bodies such as the Environment Agency, Ofwat and Local Planning Authorities. It also includes the planners, contractors and designers of housing and water assets.
The number of actors that have direct and specific ‘must do’ obligations in whole-life stewardship of water assets (eg delivery, ownership, operation, maintenance etc) is surprisingly small relative to the overall stakeholder map. This closely related network of actors near the centre of the diagram includes water companies, local authorities, developers and housing associations, private and social landlords and potentially new entities such as community stewardship organisations.
This links to the heart of the diagram – the water smart community itself. Homeowners and tenants also sit within that space - having a clear interest and direct role in stewarding assets (for example in selecting and maintaining products and materials, maintain plumbing, drainage and water appliances, and crucially as users of water). Surrounding this are other actors within the community that may play important role in local advocacy, influence and building a sense of ‘community value(s)’. {Link to Academic work]
Being specific about these different roles and how they motivate and enable action is a fundamental first step towards enabling water smart communities. This article focuses on those core actors with ‘must do’ activities, near to the heart of the stakeholder map.
2. Exploring motivations for action
Figure 1 shows how within the overall ecosystem of actors, those with direct obligations linked to stewardship of water smart assets are surprisingly small. It highlights that a relatively limited number of strategic relationships, based on defined roles and responsibilities, have a major influence. The complexities of those relationships and the way that different actors work together across the system is explored further in Article V.03 and V.o4. This article looks specifically at individual actors and explores their motivations for action.
In Figure 2 each actor within the system is represented by a ‘petal’. For each actor, the motivations for action can be grouped into different categories. ‘Must do’ activities are represented at the core of this diagram – they are the things that are done first. Within the organisation, motivations for action and value creation beyond core obligations move into the categories of ‘should do’ and ‘could do’. These are explored further in [Article V.02].
Figure2/ Each actor will have core 'must do' obligations that drive action. They may also act to deliver a range wider outcomes depending on their value(s) and capacity. This article focuses on those core motivations and explores these in relation to the EWSC challenge. Articles V.02 and V.03 look further at the non-mandatory activities and how these drive individual and collective action. (Source:Arup)
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The primary driver for action, for an individual citizen or an individual organisation, will be to discharge their core 'must do' obligations. For an organisation this will be linked to their core duties or specific services. Such as, for water companies, provision of wholesome drinking water. For local authorities this includes flood risk responsibilities that need to be balanced with many other statutory duties such as maintaining highways and public realm, waste disposal, provision education and social care. For an individual citizens, this will involve paying water bills for essential services (water is not optional), fixing drains or maintaining plumbing within the home. Council Tax and income tax will indirectly pay for certain flooding and public realm and other water-related services as part of the Local Authority, but these services are typically delivered and stewarded by others.
‘Must do’ actions are significant because the commitment to undertake them cannot be withdrawn. When under pressure actors will tend to protect their capacity to deliver must do first, with ‘could do’ and even ‘should do’ activities slowing or falling away. Pressures on local authorities during austerity or on water companies during severe droughts are examples where there is a sharp focus on resources and difficult choices need to be made. [Articles V.03 and S.02] explores this further in relation to partnership working and building of resilient stewardship institutions. ‘Must do’ actions are a key building block in the governance and stewardship of assets and resilient delivery of outcomes.
The boundaries around these mandatory duties and roles are often slow to move but they can also change. There are examples of shifts in mandatory roles having a major positive impact. There are also examples where existing systemic factors may restrict certain actions, preventing or slowing innovation. These are discussed in the following sections.
3. Acknowledging ‘Can’t do’ actions
Before moving on to explore the ‘must do actions, it is important to acknowledge that there are certain things is may not be possible for an individual or organisation to do. These ‘can’t do’ actions are represented outside of the ‘petal’ diagram. The reasons why an individual or organisation cannot act are complex. They may have to do with capability, capacity and resources, including funding. System factors such as laws and regulations can also restrict action. In the context of this article ‘can’t do’ refers more to the latter ie embedded systemic factors that strictly define boundaries of action. Clearly if any of these restricting factors were removed or changed, then ‘can’t do’ can move quite quickly to ‘could do…if…’ or, more dramatically, to ‘must do’. Some examples of these shifts are explored below.
It is important to acknowledge these boundaries and the reasons behind them, especially when working with others and defining roles and responsibilities within partnerships [Article V.03]. They link closely to expectations about how each actor will behave within the system. Sometimes there can be a perception that an individual or organisation ‘could do’ something, when in fact there are very real barriers to that within the current system. Lots of the misconceptions around ownership, operation and maintenance of SuDS – who can and can’t do what – arise from misunderstandings and lack of clarity in this area.
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A few examples of ‘can’t do’ activities illustrate this in relation to water assets:
Restrictions on provision of recycled water. Recent DWI policy preventing water companies from to supplying non-potable water to households is a good example of the very live sensitivities around this. The action is linked to definitions of ‘wholesome water supply’ (currently a ‘must do’ obligation for water companies). The DWI interpretation of non-potable water as ‘non-wholesome’ prevents planned projects for reuse systems to reduce overall potable consumption from being deployed by water companies. This is a very good example of how policy and regulations can shift actions into the ‘can’t do’ category.
Asset design- network innovation. There are historic examples too, for example certain potential innovations to optimise network design are currently ‘can’t do’ because of restrictions enshrined in the Water Act and other regulations defining for example specific minimum pipe diameters for sewers [link to KWR Article A.0X]
Asset investment- There are Ofwat restrictions on the types of assets that water companies are allowed to invest in as part of the regulated business that potentially restrict opportunities for new stewardship models. Some of thee aspects are discussed also in relation to water companies role and anchor institutions [Article V.0X, V.0x]
SuDS adoption and maintenance For English Local Authorities, too, certain actions around adoption and maintenance of SuDS have been in the ‘can’t do’ category. [expand]
4. Exploring ‘Must do’ actions
Figure 3 takes the key actors identified in Figure 1 and looks in more detail at their ‘must do’ actions relating specifically to delivery of water smart assets. ‘Must do’ actions may or may not align with values - they are not optional - they will however often be associated with some sort of value exchange, which along with payment for services, might Include penalties for inaction or rewards for good performance.
Due to the nature of water services - and in particular their critical role in public health and safety – it is important that duties, liabilities and risks are aligned to those with capability and capacity to address them. The unique place of water services, compared to, say, energy, public realm or other built environment assets limits the number and type of organisations that can realistically take on direct stewardship duties. This is particularly relevant for the supply of drinking water services (as evidenced by the recent DWI directive discussed above). There is potentially more flexibility for the supply of sewerage, drainage and flood risk services but these also need to be carefully defined in order to protect public health and safety, property and the environment.
Figure3/ Unpacking the core must-do activities for the key actors in relation to stewardship of water cycle assets Including existing mechanisms for valuing and paying for these services. This is illustrative not exhaustive analysis. These issues will be explored further as part of the EWSC project. (Source:Arup)
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Examples of changes to ‘must do’ activities relating specifically to provision of core water-related services may help to illustrate this:
Local Authority Flood Risk Responsibilities The Water Act 2010- established new mandatory roles and duties for Lead Local Flood Authorities. This has driven a new driving convergence between different actors and previously Isolated systems. [Article F.02, F.03] The forthcoming Schedule 3 – allowing LLFA in England manage SuDs – as they are able to do in Wales takes this activity out of the ‘can’t do’ and opens up new possibilities for collaboration. example can't do becoming could/should do (Is this yet must do?
Property-level stewardship. Water fitting regulations are national requirements for the design, installation, operation and maintenance of plumbing systems, water fittings and water-using appliances. designed to prevent misuse, waste, and mis-measurement and contamination of public drinking water supplies. Along with Building Regulations they are examples of mandatory duties placed on designers and developers and subsequently individual property owners, including some ‘can’t do’ and also ‘must do’ actions.
New duties linked to nutrient neutrality. This is an example of fast-moving change with new obligations on various actors. The Levelling up and Regeneration Bill has placed a new legal duty on water companies to upgrade wastewater treatment works to improve nutrient removal, New duties are placed on Local Planning Authorities and developers. Natural England recently advised 42 local authorities that they must require new developments demonstrate nutrient neutrality, stalling many new developments.
Defra Plan for Water sets ‘a new legally binding target under the Environment Act 2021 to reduce the use of public water supply in England per head of population by 20% by 2038’. How this plays out in terms of legal duties for water companies and others is complex. - it l;ikely will become part of future Performance Commitments for water companies (see Case Study 2 below) Customer water use is a function of affordability and price–setting, amongst other factors and not directly within the control of water companies. This aspiration may need to be backed up by ‘must do’ obligations on individual customers to work in practice. It is a good examples of the complexities of obligations versus incentives.
Any discussion around ‘must do’ activities goes to the heart of the debate around incentives versus regulation - ‘carrots’ versus 'sticks'. How should these mechanisms be balanced best to accelerate change, especially when within the market-driven delivery environment that characterises housing and infrastructure delivery? This remains a challenge that EWSC will explore further, in the meantime there is no doubt the shift to make some actions mandatory has significant positive impact.
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Recognising the fundamental value of the various 'must do' actions in relation to provision of water infrastructure is key. There is a risk that ‘must do’ actions, can be taken for granted and under-valued. This is particularly characteristic of water supply and sanitation, it is expected will be delivered without fail.
Regulatory frameworks and public health protections are in place to ensure a high standard of service that can often be taken for granted. The provision of water and sanitation, in particular Is normally ‘out of sight, out of mind’, until something goes wrong, either through poor performance or more systemic challenges such as drought or flooding.
Despite being fundamental to human health and wellbeing, water services are undervalued – literally in terms of the price of water and more indirectly In terms of shared value(s) surrounding water and the low priority it is given alongside other considerations in planning, design and everyday life. Within the water and planning sectors, current narratives about Impact and value of water often focus more on potential ‘wider benefits’ – such as public realm, green infrastructure, recreation etc. This focus on ‘added value’, coupled with the assumption that the core services will always be delivered, can result in a separation of these two aspects and a general downplaying of the core, arguably most valuable, actions.
This is partly result of the mechanisms for valuing core services linked to specific water company Performance Commitments paid for through individual customer bills [See also Case Study 2] along with the assumption that new infrastructure will be delivered as required by developers. This has historically led to a fairly closed system of actions and value exchange distinct from wider urban and planning discourse. [Articles F.02] Moves within the water sector to explore place-based and wider system outcomes and have tended to emerge through addressing flooding drainage and water quality rather than fundamental services such as provision of wholesome drinking water and sanitation. [Article F.03] Going forwards it is important that the whole water cycle is considered, so as not to undervalue those fundamental water services and the roles, duties and ‘must do’ actions that underpin them.
Acknowledging the value of these core services doesn’t mean being complacent about the way that they are provided. Recognising that singular technical solutions or discharging duties in isolation can miss opportunities to deliver wider value has resulted in a focus on towards more holistic approaches and delivery of wider outcomes. Having recognised the value of fundamental, often invisible, water infrastructure – the next step is to maximise the value created through its design, delivery and stewardship.
Example of a critical service becoming front of mind amongst whole population – value of must do services from water authorities and also must do actions by individuals (installing water harvesting tanks – investing in personal assets etc)
Case study 1- Cape Town Day Zero
5. Maximising value through delivery of ‘must do’ actions
The trend towards delivery of infrastructure in a way that maximises wider value is discussed further In V002 and V00x (link to anchor Institution report) Many of these actions are not mandatory, however, instead they are emerging as 'should do' or 'could do' actions, which, depending on the circumstances may or may not be delivered. As discussed above, when under pressure organisations or individuals will focus first on mandatory activities, retreating from the optional or aspirational actions. There is a risk that if wider outcomes are not mandated then the focus for individual actors turns to discharging core duties in the most efficient, singular way, doing the minimum to comply.
There are however, certain areas in which delivery of 'wider benefits' has been considered so important that is has been made mandatory through new legislation and regulations:
The Social Value Act 2012 is an example of legislation obliging public sector organisations to demonstrate social value through their procurement process. It has had a major impact on the industry. The Act may be applied in the near future to water companies although it is not currently mandated by Ofwat.
The recent Environment Act mandating delivery of Biodiversity Net Gain for new developments is another an example of wider action being mandated through this planning system with major impact on the development sector.
In Wales The Wellbeing of Future Generations Act places a legal obligation on public sector bodies to 'think about the long-term impact of their decisions, to work better with people, communities and each other, and to prevent persistent problems such as poverty, health inequalities and climate change'. As with the Social Value Act, this is initially only imposing duties on public sector but it is already having a major influence on the overall delivery environment, including shaping Welsh Water’s commitments. [Article V.02 Case study 1] discusses this in more detail.
These are positive shifts that demonstrate how mandating ‘must do’ actions can have immediate impact and significant ripple effects. In many areas however, the government and regulators have been cautious particularly in England and especially when dealing with the private sector. This is evident in the water industry [See Ofwat example - Case Study 2] It is a tension faced across many sectors including housing delivery. Local Authorities face similar challenges when under pressure to encourage private sector housing and allow decent developer profits with a desire to impose higher design standards and secure planning gain [Article F.01]. Across both water and housing sectors delivery of wider societal and environmental outcomes are often largely reliant individual actors creating their own strong value case or acting based in response to reputational market or social/cultural pressure. This is explored further in [Article V.02]
Ofwat PR24 Performance Commitments set out ‘must do’ obligations for water companies. They are primarily focused on core water services. However the latest definitions have included net zero operational greenhouse gas emissions and biodiversity, which indicates a possible shift towards mandating other types of environment and societal outcome in future.
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Wider societal and environmental outcomes are the focus of the Ofwat Public Value Principles. These are a ‘framework to help guide’ water companies who Ofwat consider ’… should seek to create further social and environmental value in the course of delivering their core services.’ Importantly this is not mandatory – the word ‘should’ here is key. There is a emphasis on delivery of the core commitments and doing this in a way that ‘…does not need to cost customers more.
Ofwat’s new market for New Appointment Variations (NAVS) also reflects these tensions and is largely focused on reducing costs. NAVs are limited companies which can provide a water and/or sewerage service to customers in an area which was previously provided by the incumbent monopoly provider. They are potentially significant actors with a key role in new stewardship models. However the focus of creating this approach is primarily to encourage market efficiency The appointment conditions for NAVs to not oblige them to demonstrate innovative water smart approaches or demonstrate delivery of wider outcomes but are instead aimed at maximising market efficiency in provision of new infrastructure to development. In the absence of mandated frameworks for delivering wider value through these largely hidden services it is possible NAVs encourage business as usual rather than being vehicles for water smart innovation.
The tension between supporting market-led approaches, efficiency and low price whilst encouraging wider value creation within he water industry is evident in these examples. [Article V.02]
Case study 2- Ofwat PR24 Performance Commitments
6. Challenge/Opportunities
This article has highlighted the significance of ‘must do’ obligations and how they motivate action. It has also raised a number of questions and areas for further consideration throughout the EWSC project:
Are the core obligations of these actors best defined to maximise transformation towards water smart communities?
Where might 'must do' activities be extended or assigned to different types of organisation to maximise impact?
Where might strictly defined roles and duties and obligations be restricting innovation?
To what extent should we further mandate the creation of value and wider outcomes through these core roles and duties
How might we balance 'must do' activities with other possible actions? Where might other Incentives and mechanisms be more appropriate than mandatory/regulatory directives?
Article V.02 explores how and why organisations might be motivated to deliver value beyond core ‘must do’ obligations.
Hypothesis
For any actor, whether an individual citizen/customer or organisation, 'must do' activities are the primary driver for action and therefore a key building block of resilient delivery, governance and stewardship of water assets. These activities should be clearly articulated and their value recognised. They should be assigned and delivered in a way that enables innovation and maximises wider outcomes.