July 2019 marks the 30th anniversary of the privatisation of the water and sewerage industry in England and Wales. Our new report published today reflects on the the achievements of the industry while setting out the industry’s future plans and how companies will tackle the challenges ahead.

Before privatisation in 1989 beaches were routinely spoiled by sewage and the water infrastructure was crumbling after decades of underinvestment. Pipes were increasingly leaking and wildlife was declining in polluted rivers. It gave Britain the unwanted nickname of “the dirty man of Europe”.

In the last three decades we’ve more than doubled the number of our beaches classed as ‘excellent’and by investing £25 billion in environmental work rivers have improved so much that the otter population, once nearing extinction, is now thriving. Our efforts to clean up 10,000 miles of rivers and waterways have even resulted in wildlife returning to riverss that had been biologically dead since the Industrial Revolution – we’ve even seen salmon, trout and even seals returning to urban rivers.

We’ve invested nearly £160 billion to make our water world class.  We’ve cut leakages by a third and ensured customers are five times less likely to suffer supply interruption and 100 times less likely to encounter low pressure than they would have been 30 years ago. Our record levels of investment have allowed us to keep bills at around the same price as they were 20 years ago in real terms.

We’ve worked hard to ensure that every home has access to world class water. Today, our drinking water passes 99.96% of quality tests – meaning cleaner, safer water every time you turn on your tap.

As the climate continues to change and our population increases, new challenges are emerging for our water – and our environment. So, we’re looking ahead to the immediate future with an additional £50 billion investment planned over the next five years, as well as setting ambitious commitments for 2030. We aim to improve and protect a further 5,000 miles of rivers by 2025 and reduce leakage by a staggering 461 million litres a day by 2030. We’ve also put initiatives in place to eliminate the equivalent of 4 billion wasted plastic bottles and reduce net carbon emissions for the sector to zero. We want to continue keeping costs low, ensuring a decade of real-term reduction to bills by 2025 and developing a strategy to end water poverty.

We’ve achieved a  huge amount over the last 30 years and while we know the next 30 will bring their own unique challenges, we have the expertise, organisation and intelligently planned investments to ensure cleaner, safer and better water for many years to come.

The Reverse Charge legislation for the construction sector has been slowly making its way through Parliament since 2017 and will come into force on 1 October 2019. The Reverse Charge will alter the responsibility in the construction sector for how businesses pay and report VAT on services.

The REC team has been corresponding with HMRC for some time about whether the Reverse Charge will apply to recruitment services. For our members in the construction sector this is obviously a concern. Whilst we understand from HMRC that the Reverse Charge will not apply to recruitment services, we are waiting for the official confirmation of this.

Why is it being brought in?

The remit of the Reverse Charge is to tackle what the HMRC calls ‘missing trader’ fraud. This involved businesses charging VAT for services provided and then disappearing without paying that VAT to HMRC.

How does it work?

The charge works by shifting the responsibility for the declaration and payment of VAT for services from the service supplier to the recipient of the services. It will be applied to all construction services and includes the cost of materials.

What about recruiters?

The Reverse Charge will apply to construction services and will affect businesses registered for the Construction Industry Scheme (CIS).  Many recruiters are registered for CIS but they do not provide construction services – rather, they provide recruitment services to the construction industry. 

That said, we understand that some clients have already told REC members that they will apply the VAT Reverse Charge to their invoices. 

The REC will continue to push HMRC for written confirmation that the Reverse Charge will not apply to recruitment services and we will update you when we receive this. For more information contact Chris Hartley in the Policy team via christopher.hartley@rec.uk.com.

We are also holding the Sector meeting for REC members in the construction sector on 14 May. The meeting will be held at REC HQ, and you can reserve your space here.

Having the right to work to provide for our families and be an active member of the community is something that most of us just take for granted. Yet for people who flee war and persecution and come to the UK seeking safety, they are denied that right – and forced into a life of poverty by being banned from working.

People seeking asylum in the UK are only able to apply for the right to work after they have been waiting for a decision on their asylum claim for over a year. Even then, the few people who are granted permission are rarely able to work because they’re restricted to an incredibly narrow list of jobs such as classical ballet dancer and nuclear medicine practitioner. It just doesn’t make sense.

We know that if half of the people seeking asylum were granted the right to work and earned a national average wage, £42.4 million would be recouped by the government through tax and national insurance payments and savings in financial support.  

The public is in favour of lifting the ban with 71% agreeing that people seeking asylum should have the right to work; and MPs of all parties have strongly backed the call in parliament.

A survey we conducted last year of people with direct experience of the asylum process revealed that 74% had secondary-level education or higher and over a third held an undergraduate or postgraduate university degree. It is shameful that we are letting these talents go to waste for months or even years on end.

That’s why we at Refugee Action, together with our partners at Asylum Matters, are leading a coalition of over 190 members to urge the government to Lift the Ban stopping people seeking asylum from working.

Members of the Lift The Ban coalition include the CBI, TUC and other trade unions, think tanks, faith groups and businesses like Ben and Jerry’s.

Together, we’re calling for the UK to give people seeking asylum the right to work after six months, without narrow restrictions on the type of jobs they can apply for - a move which would bring us in line with every comparable nation.   

We’re thrilled to now have REC on board to bring its expertise in the workplace to help us champion the rights of those who have so many skills to offer.  

We want to see the government move rapidly on this issue – which is why we need you to join us, add your voice and help us Lift The Ban.

Ofwat has today confirmed a package of measures to strengthen water companies’ financial resilience, by calling on them to adopt a common set of standards.

This includes strengthening requirements to maintain an investment grade credit rating and accepting restrictions on pay-outs to shareholders in certain circumstances.

The regulator has launched a consultation on the proposals which are aimed at strengthening the regulatory ring-fencing framework to bring all licences up to the industry leading standard via licence conditions which are consistent across the industry.

The proposals build on previous consultations and discussions in industry workshops, and specifically relate to:

• maintaining investment grade credit ratings and cash lock-up;
• providing ring-fencing certificates;
• reporting of material issues; and
• change of control.

The so-called cash lock-up conditions mean that if a water company is at risk of losing its investment grade rating, it is barred from making pay-outs to shareholders or removing money or assets from the business. Once the cash lock up is triggered, the firm cannot release any funds to its holding company or other associated businesses, including paying dividends, without Ofwat’s consent.

The consultation paper says:

“It is.. our view that the same standard of protection should apply consistently to every Appointee irrespective of business model, ownership structure or listing status. … We believe that a consistent and equivalent standard is most simply and transparently achieved when each company has identical licence conditions. “

According to the regulator, by proposing that companies must ensure an investment grade credit rating, greater clarity of expectations is provided to companies and a clearer decision making process for Ofwat.

The changes are intended to further safeguard customers’ interests by ensuring water companies remain financially robust and continue to attract investment.

Rachel Fletcher, Chief Executive at Ofwat said:

“Water companies must provide resilient services to their customers. To do that, they need to be financially resilient. To help secure that, we want to introduce clearer, consistent requirements and protections.

“These protections will give greater assurance to customers about all water companies’ financial stability and long-term resilience.”

Deadline to submit responses to the consultation is 8 January 2019 – click hereto access the consultation document Consultation on strengthening the regulatory ring-fencing framework

The world of work is constantly changing: new technologies, automation, changing demographics and different worker expectations and working patterns all mean that the recruitment industry needs to be constantly adapting and preparing for the future.

The REC’s Engineering and Construction sector groups met recently to form a joint infrastructure group. Over 60 members shared their thoughts and predictions for what the next five to seven years holds for the industry. 

New technologies: threat or opportunity?

Whilst for many the future is uncertain, for others, the introduction of new technologies is having an impact and is likely to accelerate in the years ahead. Drones are already being used on building sites to quickly assess land and even make cost calculations! Will this mean an end to jobs such as quantity surveyors in the years ahead, or will it open up opportunities for a different type of worker to enter the industry?

With the advent of new technologies and software impacting on the actual recruitment process itself in some sectors, members in infrastructure were very optimistic that their services would still be needed in the future. Workers and clients still want the ‘human touch’, and members felt that software would only act to supplement the services of professional recruiters by speeding up the process.

Diversity

Women are hugely under-represented in the engineering and construction sectors, something that recruiters are keen to address. But the feeling is very much that the culture of the whole industry needs to change if we are to address the imbalance. New technologies may be a route in for many women, and members were keen to explore this. But the importance of female role models - at all levels - was cited as the best way of encouraging more women into the sector.

Promoting the sector

The lack of good careers advice in schools has long been cited as a problem, all the more in construction and engineering. Members felt that the industry needs to be proactive in promoting the sector to the next generation of workers. The importance of local employers going in to schools to promote careers in local businesses is important. However, with skills shortages continuing to be an ongoing problem in the sector, many employers do not want to play the long-game - they want the workers now. Many schools are simply resorting to asking parents to come in to promote their careers. There is clearly a need for a more centrally co-ordinated approach.

Future of jobs commission

The Future of jobs commission will be looking at all aspects of the future world of work. Not only will it be providing an analysis of the landscape, and its potential impact on members, it will also be making concrete recommendations to government. If you would like to feed in to the commission’s work, please contact neal.suchak@rec.uk.com.

The REC has been engaging in the good work agenda from the outset. First with Matthew Taylor to feed into his report to government and subsequently with the government in the lead up to the publication of the Good Work Plan, ensuring the recruitment industry’s voice has been heard along the way. We support many of the principles and recommendations in the review, particularly the emphasis on transparency. Now, as legislation is gradually introduced, we are seeking to ensure the government guidance is clear and works for recruiters and that we provide our members with everything they need to know to get prepared for some of the legislative changes that may be coming into force in the near future. 

Below is a rundown of the changes.

Itemised payslips

From 6 April 2019, all workers (not just employees) have been entitled to receive a payslip. This must document any variation in pay across the time worked. You can read our legal guide for more information on itemised payslips. 

The introduction of a Key Information Document

The Key Information Document legislation was agreed by parliament through secondary legislation in March. From April 2020, it requires employment businesses to provide work-seekers with a ‘Key Information’ Document before terms are agreed between the employment business and the work-seeker. This includes:

• the type of contract a worker is employed under
• the minimum rate of pay that they can expect
• how they are to be paid
• if they are paid through an intermediary company
• any deductions or fees that will be taken
• an estimate or an example of what this means for their take home pay

The principle behind the legislation is to increase transparency for the work-seeker on what they will be paid where there are other intermediaries in the supply chain, for instance when an umbrella company or personal service company is involved.

Swedish Derogation

As expected following the Taylor Review, the government confirmed in December that they would abolish so-called Swedish Derogation contracts – which currently allow agency workers to trade off equal pay for pay between assignments before terminating the contract. Secondary legislation has been agreed and these contracts are no longer legal from April 2020.

Written statement

From April 2020, an amendment to the Employment Rights Act 1996 will mean that employees and workers are entitled to a written statement from day one of their employment about their employment status, days and times required to work, remuneration (not just pay), entitlements such as training, sick leave and maternity/paternity leave, duration of contract and notice and probation periods.

Holiday pay legislation and guidance

The government is currently campaigning to promote the entitlement to holiday pay and has made guidance available to workers and businesses to assist with calculating holiday pay entitlement for irregular hours. From April 2020, the holiday pay reference period will increase the pay reference period from 12 to 52 weeks (or time worked, if less than 52 weeks).

Future Legislation

Finally, in the Good Work Plan the government made several proposals for future legislation or regulative changes. These are part of a drive by the government to update employment law in the UK to better reflect and keep up with changes in the labour market and workplace. A number of these proposals are likely to impact on the recruitment sector including the intention to regulate umbrella companies, legislation to clarify and align employment and tax status, and the right to request a more stable and predictable contract. Along with this, we are likely to see consultations on proposals to tackle ‘one sided flexibility’ looking at legislation to enforce payment for cancelled shifts and reasonable notice periods.  The REC will continue to update and consult members on future changes and engage with government on the possible impacts of any future legislation.

Keep an eye on the Good Work hub for all the latest member resources and support. 

Although water utilities have made great strides in reducing leakage, wasting water needs to become the next big social ‘no-no', ABB electromagnetic flow product manager Alan Hunt writes

This year, ‘flaming June’ singularly failed to live up to its reputation, with drizzle and downpours nearly every day, followed by the inevitable floods. It underlined the fact that we live on a damp group of islands and explained why the public think of the UK as having water, water everywhere and always enough to drink.

Yet we only need to go a few weeks without significant rainfall and the reservoirs start to look parched.

And, wherever you live in the world, water sources are under growing pressure. According to UN-endorsed projections, global demand for fresh water will exceed supply by 40 per cent in 2030. The culprits are a combination of climate change, human action and population growth. 
The consequences of growing demand and inadequate supply are already with us.

In late 2017, the city of Cape Town in South Africa faced an acute water crisis. Water levels in the dams that supply the city were down to less than 30 per cent of their capacity and people had started to talk about ‘Day Zero’ – the day when water supplies would be switched off and residents would need to queue for their daily ration. Cape Town was in danger of becoming the world’s first major city to run out of water.

The answer was severe water restrictions, cutting consumption in half. By the end of 2018, with further rains, the worst was over.

UK running on empty?

The problem is also hitting closer to home. London may not have the same water issues as Cape Town but there is still no cause for complacency. With an average annual rainfall of about 600mm – less than Paris and only about half that of New York – London draws 80 per cent of its water from rivers. The Greater London Authority recognises that the city is approaching capacity and is likely to have supply problems by 2025 and "serious shortages" by 2040. Hosepipe bans could become more common in the future.

Sir James Bevan, chief executive of the Environment Agency, recently issued a stark warning that unless we do something soon, England is on course for water shortages within 25 years. Rising consumption will meet decreasing supply at a point on the graph known as the ‘jaws of death’ – at that point, we simply will not have enough water to supply our needs.

The warning signs are already there in the form of the Water Exploitation Index (WEI), which identifies whether the rates of water abstraction are sustainable in terms of the amount of rainfall received. WEI is a ratio of mean annual freshwater resources to mean annual total abstractions of freshwater, expressed as a percentage.

Areas with a WEI of above 20 per cent are regarded as over-exploited. According to the Environment Agency, 12 areas in south-east England are already under serious water stress – the same level of water stress as countries such as Italy, Malta and Spain.

The problem can only grow as the climate changes. The latest UK Climate Projections suggest that the UK is likely to experience warmer summers and milder winters, wetter winters and a higher frequency of intense rainfall events, a greater number of severe weather events and more frequent drought and flooding events.

Consumers must do more

We can identify three issues affecting how much water is available for use.

The first is leaks. People often blame water companies if water is lost through leaks yet suppliers are making huge strides in controlling leakage and are committed to further stringent reductions.

Another reason is the quality of treated water returned to the rivers. This needs to be high to ensure minimum processing is required further downstream to make it potable. Since MCERTS was introduced by the Environment Agency 20 years ago, there has been a huge improvement in how utility and industrial companies measure their effluent water discharges.

The third main reason is the real elephant in the room – how much water consumers use and waste and users’ attitude to it.

Part of the problem is that improved housing standards and technological developments have led to increased bathing and washing options, which means increased water use. Add in the pressures of an increasing population and water used in the home accounts for over half of all public water supply use.

Home users see water as an inexhaustible supply and in fact many people resent having to pay for it at all. When water charges were introduced by the Irish government in 2014, there were mass protests at having to pay for what had previously been free. People need to think about whether they really need to wash the car every week, or whether their lawns actually do need so much watering.

For example, the average home uses 140 litres of water a day, 56 litres in the bathroom and 31 litres in the toilets. Nearly half of homes could make efficiency improvements to their toilet, either by using a cistern water displacement device or upgrading to a dual-flush toilet, which would save 12,500 litres per person per year – the equivalent to 150 average-sized baths full.

Water-efficient washing machines and taking showers instead of baths can all help. New water-efficient showerheads can produce water flows that feel far higher than they actually are - an easy way to save both water and energy.

Reduced-capacity baths can also help. A standard bath has a capacity of around 80 litres, so even a half-full bath uses a lot of water. Water-using appliances such as dishwashers or washing machines now carry the new Water Efficient Product Label and/or the Waterwise Recommended Checkmark.

If we could cut household consumption to just 100 litres a day and reduce leaks by 50 per cent, we would have enough water for 20 million people, without taking any more from the environment.

Getting these messages across to consumers requires the efforts of everyone involved in the industry. Many water companies are conducting household water audits and working with social housing providers and schools to educate children on water efficiency. Information on improving household water use is readily available to consumers through water utilities, consumer bodies and DIY chains while some water utilities offer devices for improving efficiency in homes.

The energy factor

Another factor is the energy involved in the business of providing and using water. Many people are concerned about energy production and the carbon dioxide emissions it produces, but water treatment and pumping is an energy-intensive business – for example, Scottish Water is the largest user of electricity in Scotland. A third of all electricity worldwide is used for pumping fluids, and water is bound to make up a large proportion of that. Every litre of water wasted means another litre must be treated and pumped, adding more carbon to the emissions burden.

A lot of water consumers may not even realise that their water use at home contributes to their energy bills, mostly to heat the water – heating water for use in our homes makes up about four percent of the UK’s total carbon dioxide emissions.

Possibly the route to spreading this attitude lies with the young. They have a great awareness of environmental issues but, for many, water use is not currently on their radar. They are more concerned with emissions of greenhouse gases, so linking energy use and water wastage could be the key to getting them on board.

We need a new attitude to water, one that sees it as a strictly limited resource that we guard jealously – as Sir James said, it should be as unacceptable to waste water as it is to blow smoke in a baby’s face or throw your plastic bags in to the sea.

Could the Government do more? Do we need a return to the old public information films from the 70s? With social media behind them, today’s equivalents could go viral and really bring the message home.

Today, many attitudes and practices we never thought twice about in the past are just not acceptable – we need to make wasting water another example of anti-social behaviour.

The leader of Cardiff city council has set out a £1bn transport vision for the Welsh capital.

A key part of the plan would be new city crossrail tram-train line running from east to west.

Council leader Huw Thomas said funding options would need to be looked at by Transport for Wales and Network Rail.

He also added that capital sums previously earmarked for the cancelled M4 Newport relief road must now be invested in South East Wales.

Key projects

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• Cardiff Cross Rail – a new light rail/tram line from east to west connecting major population centres and new suburbs in the west with Cardiff Central
• Cardiff Circle Line – a joined up complete orbital light rail/tram line linking large residential areas to the transport network
• A new park and ride at junction 32 of the M4 connected to the Circle Line
• A new Rapid Bus Transport Network using green and electric vehicles
• New, safe cycleways and walking routes linked to bus, rail and tram networks
• An integrated ticketing system allowing the user to move seamlessly from one transport mode to another.
• Making Cardiff a 20mph city

Thomas said: “It is clear we won’t deliver this overnight, but we are today bringing forward the council’s aspiration while fully recognising that we will have to work effectively with Welsh Government and other partners.

“We will also need to have a serious public conversation about how this vision can be funded.”

“We have consistently argued that the city’s future prosperity relies on an effective transport infrastructure, with seamless access to the UK’s motorway network, and free-flowing routes into, and around the city.”