Regulatory functions and charges

10 Requirement for Ofwat to have regard to climate change etc
In section 2 of the Water Industry Act 1991—
(a) after subsection (4) insert—

“(4A) In exercising or performing any such power or duty in accordance with those provisions, the Authority must also have regard to the need to contribute towards achieving compliance by the Secretary of State with the relevant environmental target duties, where the Authority considers that exercise or performance to be relevant to the making of such a contribution.
(4B) The “relevant environmental target duties” means—
(a) the duty in section 1 of the Climate Change Act 2008 (UK net zero emissions target), and
(b) so far as the exercise or performance concerned relates to appointment areas wholly or mainly in England, the duty in section 5 of the Environment Act 2021 (other environmental targets);
and for that purpose an “appointment area” is an area for which an appointment is held under Chapter 1 of Part 2.”;

(b) in each of subsections (6A), (6B) and (7), for “(4)” substitute “(4A)”.

11 Charges in respect of Environment Agency and NRBW functions
In section 41 of the Environment Act 1995 (powers of environmental regulators to make charging schemes)—
(a) in subsection (1), after paragraph (s) insert—

“(t) as a means of recovering costs incurred by it in performing water industry enforcement functions, the Agency or the Natural Resources Body for Wales may require the payment to it by water companies of such charges as may from time to time be prescribed;”;

(b) after subsection (1A) insert—

“(1B) In paragraph (t) of subsection (1)—
“water companies” means—
(a) water undertakers and sewerage undertakers, and
(b) water supply licensees and sewerage licensees within the meaning of the Water Industry Act 1991;
“water industry enforcement functions” means functions performed for the purpose of assessing or securing compliance by water companies (within the above meaning), or responding to failures on their part to comply, with any provision made by—
(a) sections 205A and 205B of the Water Industry Act 1991 (pollution incident reduction plans and implementation reports),
(b) Chapter 2 of Part 2 of the Water Resources Act 1991 (water abstraction and impounding),
(c) Chapter 3 of that Part (drought orders and drought permits), or
(d) the Environmental Permitting (England and Wales) Regulations 2016 (regulation of certain facilities and activities),
but, in relation to water supply licensees and sewerage licensees, includes those functions only so far as performed in respect of the activities to which their licences relate.”

12 Drinking Water Inspectorate: functions and fees
(1) The Water Industry Act 1991 is amended as follows.
(2) For the italic heading before section 86, substitute “Drinking Water Inspectorate”.
(3) In section 86 (appointment and functions of inspectors)—
(a) for the heading substitute “Appointment and functions of inspectors”;
(b) in subsection (1)—
(i) omit the “and” after paragraph (a);
(ii) after paragraph (b) insert “; and

(c) arrangements for assessing and securing compliance, and responding to failures to comply, with directions (or any particular direction) under section 208.”

(4) In section 86ZA (charging of fees by inspectors), after subsection (3) insert—

“(3A) A fee may be made chargeable under this section in relation to—
(a) a specific instance in which the function is exercised, or
(b) the exercise of the function more generally during a particular period of time (which need not be limited to its exercise in relation to the person charged with the fee).”