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					                                    Water Charges – Impact on Churches

              A briefing for Members of Parliament from the Church of England

The Church of England has estimated that it faces an annual overall increase in its water bills of
up to £15 million, as a result of changes made to the way in which water companies can charge
for drainage.

Changes to the charging schemes for surface and highways water drainage have already begun to affect
churches, particularly in the north of England. It is possible that water companies across the rest of the
country may follow the precedent set by those four companies - United Utilities, Northumbrian Water,
Yorkshire Water and Severn Trent – that have to date implemented new charging regimes.

What changes are being made to charging regimes?

Since the 1999 Water Industry Act, the water companies have introduced new charging regimes for the
three main elements of drainage:

      (1)   Foul water drainage: waste water from sinks, WCs etc
      (2)   Surface water drainage: rainwater run off from roofs and car parks into main drains
      (3)   Highways water drainage: a contribution towards the overall cost of drainage for public
            highways

A distinction is also drawn between household customers and non-household customers. Non-household
customers encompass users that are business and non-business (churches, community and voluntary
organisations, etc).

Previously non-household customers would be charged on the basis of the rateable value of the property.
Properties which were formerly exempted in their own right from business rates, such as places of
worship or properties used for the disabled, or which enjoyed relief by virtue of being charities, such as
Scout halls, will now be subject to the same rates as business users, as they fall within the non-
household category.

Using examples from United Utilities, it is clear that if correctly assessed, surface water charges for a
medium sized church with a small car park could be £300-£500, but up to £2,000-£5,000 for some larger
churches with extensive paved areas or car parks. If fully implemented across the country on this basis,
the estimated annual cost to Church of England churches and cathedrals alone is likely to be around £5
million for surface water drainage and £10 million for highways drainage contributions.

Whilst the water companies maintain that the overall changes for non-domestic customers are revenue-
neutral to them, it is the balance of charges within the non-domestic category that has shifted significantly
towards increases for places of worship and charitable customers.

The charging regimes were approved by Ofwat, which also monitors water companies’ performance
against the Government’ guaranteed standards of service.

Who else does this affect?

Although this is an issue of particular concern to the Church of England, it will also adversely affect many
other churches and non-Church bodies and charities, such as the Scout Association, and those who
maintain village halls and sporting facilities. The Church, through its membership of the Churches
Legislative Advisory Service, is working with umbrella bodies, such as Community Matters (the National

               Water Charges – Impact on Churches: A briefing for Members of Parliament from the Church of England   1
Federation for Community Organisations, representing over 1,100 member organisations) and the Charity
Tax Reform Group on assessing the impact of charging at a local level and ensuring that the results are
made known to DEFRA and the Office of the Third Sector.

Why should churches and voluntary organisations be treated any differently than other non-
domestic customers and businesses?

The government has frequently stated its support for the good work carried out, particularly by churches,
in promoting community cohesion and voluntary action. Such increases in running costs risk putting that
work in jeopardy as funds become diverted into building maintenance.

When considering contributions to highways drainage, it does not appear appropriate to use site area (of
both buildings and surrounding hard standings) as a means of assessment. The effect is that church
buildings and community halls with a large roofs but little car parking will be charged the same as smaller
business premises with substantial and much more highly used car parks. Further, churches and
community groups become liable to this charge even where their surface water drainage runs into
soakaways – in line with best environmental practice - but where they have a foul water connection.
Many churches, currently with no amenities, wish to provide WCs and kitchen facilities to allow for greater
community use of the building, but will be dissuaded because of the ensuing liability for a substantial
contribution towards highways drainage based on roof area.

Many urban churches built in the Victorian era were constructed with access to the sewerage system, not
water run-off in mind. These churches are likely to be hit disproportionately hard.

What scope is there for churches and community organisations to ask for refunds or challenge
increases in bills?

Anecdotal evidence collected so far suggests that in many cases assessments have not been made
correctly, resulting in charges to churches 5-10 times higher that they ought to be. Customers can
challenge the assessment made by water companies of increases to their charges. However, the onus
falls squarely on the customer and it is their responsibility to apply for relief or to demonstrate any errors
in charging to the company. We do not believe this is fair. This places undue administrative and financial
burdens on churches and voluntary organisations. In all cases the revised charging will begin immediately
and will continue unless and until a customer can prove the assessment wrong. The United Utilities
website outlines how much a customer is required to do in order to challenge the initial assessment:

“Find out where the surface water from your premises flows to and draw an accurate diagram. This must
show the following: roads, footpaths and neighbouring premises; permeable areas such as any
permanently grassed or cultivated area of playing field, farmland, racecourse, sports ground, golf course,
parkland etc; the boundary of your premises; any nearby public sewers; and where your surface water
drains to. If the charging value of your premises is over £1,000 or the site area is >649m2, the diagram
must be drawn and certified by a qualified professional, such as an architect or a surveyor. They will also
be able to help you if you are in any doubt about your site drainage.”

The ability of individual water companies to exercise discretion in how they enforce charges across the
board to all non-domestic customers is subject to close scrutiny by Ofwat.
                             rd
In a written answer on 23 April 2007, DEFRA minister Ian Pearson confirmed that: “My right hon. friend
the Secretary of State issued guidance in 2000 on matters that Ofwat must have regard to when
exercising its power to approve charges schemes. This explains that it is inappropriate to charge all non-
household customers as if they were businesses. If premises such as churches are charged on the same
basis as the other non-household users, they can face disproportionately high costs. Such premises
should be able to benefit from tariffs which reflect their relatively small demand on the water system.”
                                                 th
However in a written answer on April 29 2008, DEFRA minister Phil Woolas said that: “Companies are
obliged under their licences to ensure that charges are neither unduly preferential or unduly

               Water Charges – Impact on Churches: A briefing for Members of Parliament from the Church of England   2
  discriminatory between groups of customers. Ofwat therefore considers that churches and other places of
  worship should be treated no differently to other non-household customers.”

  We note with concern that Ofwat recently required Severn Trent Water to apply charges to churches in
  the Leicester diocese, despite the company agreeing with churches to maintain the previous
  arrangement.


  What movement has there been in Westminster / Whitehall?

  Several MPs have tabled questions to ministers in the House on this issue.

  The widespread public concern about the issue is underlined by the fact that a petition on the 10 Downing
  Street website, started by a Teesside churchwarden whose church had seen a 1,300% increase in its bill,
  is currently the most signed (over 38,000 signatures to date).

  A House of Commons Early Day Motion, highlighting the actions of United Utilities and the impact of
  rising charges on churches, which attracted 46 signatures in the last session, has recently be re-tabled by
  Lindsay Hoyle MP, as EDM 357.

  DEFRA ministers have yet to pronounce on whether any further guidance will be issued to Ofwat,
  although they have given assurances that the views of the churches and the voluntary sector have been
  heard.

  The likely impact on Church and community life of these new charges is something that may become
  increasingly apparent at a constituency and local level. In that respect, we would be interested to hear of
  any specific situations that have been brought to your attention and would encourage you to make those
  cases known to DEFRA and Ofwat.

  The General Synod of the Church of England will be debating a private member’s motion on the subject
  when it next meets in February.




This briefing was produced by the Parliamentary Unit of the Church of England, based at Church House,
Westminster.

The information within it represents our own understanding of the regulatory position.

For further information on these issues, please contact:

Stephen Bowler, Deputy Director
Cathedral & Church Buildings Division
Church House
Great Smith Street
London SW1P 3AZ
020 7898 1860 / stephen.bowler@c-of-e.org.uk




                 Water Charges – Impact on Churches: A briefing for Members of Parliament from the Church of England   3

				
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