Actors, roles and value(s)

The significance of ’must-do’ and ’can’t do’ actions for enabling Water Smart Communities

Words by Arup | published in Rethinking Current Practices

Actor, roles, and value(s). Illustration by Arup for the EWSC project.

This is part of a series of insights articles focussing on value. This article focuses on the ecosystem of actors brought together by WSC, their existing and potential roles and the importance of ‘must do’ and ‘can’t do’ shaping the space of potential action.

Introduction

Enabling Water Smart Communities (WSCs) requires action across multiple systems and scales. Across water, housing and other sectors there are many perspectives, aspirations, priorities, obligations, capacities and capabilities that inform how individuals, communities and organisations act.

Early in the project the EWSC team identified three themes as potentially critical enablers: value, assets and stewardship. The three concepts are highly interdependent. When considered together they can help to identify and unlock enabling actions within a complex and constantly shifting delivery environment. They have formed the basis of the EWSC Model.

EWSC Model. Illustration by Arup for the EWSC project.

1. Mapping the ecosystem of actors

The ecosystem of actors related to Enabling Water Smart Communities (EWSC) is expansive and complex. It ranges from individual customers and community groups, through water companies, local authorities, developers, designers and contractors, to regulators, policy makers, NGOs, activists and influencers. EWSC has begun mapping these potential actors and their specific interest and agency in relation to the EWSC challenge and in particular their roles in delivery and stewardship of water smart assets.

The image below presents an overview of this stakeholder ecosystem developed as part of the discovery phase. This is just a snapshot of an ongoing process.

Enabling Water Smart Communities: unpacking the ecosystem of actors. 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. Note : ‘Water Smart Asset Stewardship’ in this diagram refers to actors who have direct stewardship roles relating to water cycle assets connected to EWSC. (These ‘must do’ responsibilities are explored further in Section 4 below.) Illustration by Arup for the EWSC project.

Various observations can be drawn from this initial mapping exercise:

• Many stakeholders are connected to and influenced by water systems, but the number that are currently aware of that influence and actively engaged with water as a challenge is limited. There are opportunities to extend advocacy and influence amongst existing actors and to create new roles and responsibilities.
• Recent years have seen issues such as flooding, CSO spills, bathing water quality, leakage, nutrient neutrality and the governance of water companies moving up the agenda, with significant media interest. As a result, a growing number of stakeholders have moved from a relatively passive position to actively engage with water-related issues. Examples include environmental NGOs, activists, industry bodies and professional institutions, developers and even policy makers as they become more aware of water-related challenges.
• 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 DLUHC, 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. At local scale plumbers, gardeners, suppliers and maintenance contractors also play a key enabling role.
• The number of actors that have direct and specific obligations in whole-life stewardship of water assets (e.g. investment, delivery, ownership, operation, maintenance etc) is relatively small within the context of 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. Some organisations, such as the Environment Agency act as regulators and also have specific duties as asset owners and operators.
• At the heart of the stakeholder map is the 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, maintaining plumbing, drainage and water appliances within the home, 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)’. The EWSC Communities and Engagement workstream is exploring how everyday practices in water smart communities influence notions of assets, value and potential stewardship. This work will be developed further through the project.

Being specific about these different roles and how they motivate and enable action is a first step towards enabling water smart communities. This article focuses on the core actors with ‘must do’ activities. They are at the heart of the stakeholder map.

2. Drivers for action

For each actor, the motivations for action can be grouped into different categories as illustrated below. ‘Must do’ activities are represented at the core of this diagram — they are the things that are done first — and are the focus of this article. The area between ‘must do’ and can’t do’ — shown in green — represents a space of choices and possibilities where action is more strongly linked to value(s) and in particular a specific value case. This is explored further in our article Making the value case for action towards wider outcomes.

3. Boundaries: Acknowledging ‘can’t do’ actions

Before moving on to explore the ‘must do’ actions, it is important to acknowledge that certain things may not be possible for an individual or organisation to do. These ‘can’t do’ actions are represented outside of the above ‘petal’ diagram. The factors that limit individuals’ or organisations’ actions are complex. They may have to do with capability, capacity, resources, funding and, sometimes, values and beliefs. 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 i.e. embedded systemic factors that strictly define boundaries of action.

Here are a few examples of ‘can’t do’ activities to illustrate this in relation to water assets:

• Provision of recycled water. Recent guidance on water recycling from the Drinking Water Inspectorate (DWI) is a live example of how regulations can impact potential new approaches. Provision of ‘wholesome water supply’ is currently a ‘must do’ obligation for water companies under Section 68 of the Water Act 1991. DWI guidance on the application of the Act defines wholesome water as potable only, placing a ‘can’t do’ restriction on water companies in terms of supply of non-potable water to homes. DEFRA is currently undertaking a rapid evidence assessment of the issues around water recycling. Supporting new ways forward in this area is a key focus of the EWSC project.
• Network design innovation. Certain potential innovations to optimise network design within new developments are currently ‘can’t do’ because of historic restrictions enshrined in the Water Act 1991 and other regulations defining, for example, specific minimum pipe diameters for sewers.
• Asset investment. There are Ofwat restrictions on level of investment and the types of assets that water companies are allowed to invest in as part of the regulated business that potentially influence opportunities for new stewardship models. Some of these aspects are discussed also in relation to water companies’ role as anchor institutions.
• SuDS adoption and maintenance. Schedule 3 of the Flood and Water Management Act 2010 makes SUDS mandatory in new developments and sets out new mechanisms for their adoption ownership and operation. This has already been implemented in Wales. Schedule 3 is set to be implemented in England in 2024, removing certain ‘can’t do’ restrictions for local authorities linked to adoption and whole life maintenance. It also reinforces certain ‘can’t do’ actions for developers, such as disallowing connection of surface water into combined sewers.
• Paving front gardens. Regulations preventing impermeable paving over gardens and drives is an example of the introduction of a ‘can’t do’ restriction on activities within individual homes and gardens.

Acknowledging these boundaries, the reasons behind them, and the impacts of potential change is crucial when working with others and defining roles and responsibilities within partnerships. 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.

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.

4. Setting obligations: The significance of ‘must do’ actions for delivery of water services

The primary driver for action of an individual person 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 as well as meeting the basic public health and safety needs of their members. For water companies, it will be about the provision of wholesome drinking water. For local authorities obligations include flood risk responsibilities, primarily for surface water flooding, that need to be balanced with many other statutory duties such as maintaining highways and public realm, waste disposal, provision of education and social care and so on. For individual people non-optional water-related actions within the home include water use for essential public health needs such as drinking, hygiene, cooking and washing. For most households this will involve needing to pay water bills (although customers cannot be disconnected for not paying water bills, and, for some, bills may be paid by others or subsidised). Beyond satisfying these basic needs things that must be done by homeowners or landlords might involve buying/maintaining/replacing fixtures and fittings, water heating, fixing drains or maintaining plumbing. ‘Hidden’ obligations for individual people may include, for example, the proportion of Council Tax and income tax that indirectly pays towards addressing flooding and public realm and other water-related services delivered by the Local Authority and other Risk Management Authorities.

The diagram below looks at the group of actors with direct obligations for stewardship of water assets. This group is small within the overall ecosystem of actors, highlighting that a relatively limited number of strategic relationships, based on defined roles and responsibilities, have a major influence. The table takes these key actors and looks in more detail at their ‘must do’ actions relating specifically to delivery of water smart assets linked to different aspects of the water cycle. These ‘must do’ actions may or may not align with values, since they are not optional, but they will often associated with some sort of value exchange, which, along payment or other transaction might be associated with penalties for inaction or rewards for good performance.

Unpacking the core must-do activities for the key actors in relation to stewardship of water cycle assets at community/development scale. This is illustrative and not an exhaustive analysis of what is a complex area. In certain circumstances other actors such as landowners, riparian owners or farmers may have specific duties depending on the scale and type of development. Some organisations such as the Environment Agency may play a dual role in stewardship, both regulating and (as indicated above) owning and operating assets. These issues will be explored further as part of the EWSC project, including potential new roles and entities that may take on stewardship roles. Image Source: Arup.

‘Must do’ actions are a key building block in the governance and stewardship of assets and resilient delivery of outcomes. ‘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 public finances, shocks such as COVID, geopolitical events, floods or droughts, for example, may mean difficult choices for individual actors within the system. Our article Rethinking Stewardship explores this further in relation to partnership working and the importance of building of resilient and adaptive stewardship models.

Due to the nature of water services — and in particular their critical role in public health and safety — it is important when defining or reviewing these boundaries that duties, liabilities and risks are aligned to those with capability and capacity to address them. The unique character of water assets and services, compared to, say, energy, public realm or other built environment assets tends to limit 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 DWI directive on water reuse 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.

The boundaries around these mandatory duties and roles are often slow to move but they can change. There are examples of shifts in mandatory roles having a major positive impact, with wide-ranging ripple effects. As discussed above there are also examples where existing systemic factors may restrict certain actions, preventing or slowing innovation. The following are some examples of existing or potential ‘must do’ activities relating specifically to provision of core water-related services and functions:

• Local Authority Flood Risk Responsibilities. The Flood and Water Management Water Act 2010 established new mandatory roles and duties for Lead Local Flood Authorities and other Risk Management Authorities. This has driven the convergence of actors operating previously isolated systems. The forthcoming Schedule 3 — setting up Approval Bodies to adopt SuDS in England (as is currently the case in Wales) takes this activity out of the ‘can’t do’ and opens up new possibilities for collaboration.
• 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. These are designed to prevent misuse, waste, 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. Revising such regulations can be key mechanisms for influencing system-wide action. This is currently being explored in relation to water efficiency by the Future Homes Hub on behalf of DEFRA.
• New duties linked to nutrient neutrality. This is an example of a fast-moving change with new obligations on various actors. The Levelling up and Regeneration Act places a new legal duty on water companies. They are required upgrade wastewater treatment works to improve nutrient removal that results from wastewater from new development. Amendments to the Habitats Regulations allow planning conditions to be applied in certain catchments, requiring developers to demonstrate nutrient neutrality.
• 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. Beyond basic needs, customer water use is a function of many factors including affordability and other social and material factors producing particular patterns of use that are not directly within the control of water companies. To work in practice, this aspiration may need to be backed up by more robust measures to influence customer water use and behaviours.

Through these examples it can be seen that the discussion around ‘must do’ activities goes to the heart of the debate around incentives and choices versus regulation — ‘carrots’ versus ‘sticks’, and individual versus system- scale interventions. How should these mechanisms be balanced to accelerate change, within the market-driven delivery environment that characterises housing and infrastructure delivery? This remains a challenge that EWSC will explore further within the context of the EWSC Framework.

5. Recognising the value of the ‘must do’ actions and the delivery of core water services

Recognising the fundamental value of the various ‘must do’ actions in relation to provision of water infrastructure is key. There is a risk that some of these ‘must do’ actions, can be taken for granted and under-valued. This is particularly characteristic of water supply and sanitation; it is generally expected that these services 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.

Current cross-sector narratives about the impact and value of water often focus more on potential ‘wider benefits’ — such as public realm, green infrastructure, recreation, economy — than on the value delivered by fundamental water services. Despite being critical to human health and wellbeing, water services are often given low priority alongside other considerations in planning, design and everyday life.

This is partly the result of the mechanisms for valuing core services linked to specific water company Performance Commitments paid for through individual customer bills [see case study below], along with the assumption that new infrastructure will be delivered as required by developers. This is has historically led to a closed system of actions and value exchange distinct from wider urban and planning discourse. 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. This is partly because flooding has so far been the more obvious challenge, but partly because water supply and wastewater systems — being more hidden — are harder to represent. This is already changing with increased awareness of water scarcity. Going forward, it is important that the whole water cycle is considered and represented, including assets and water use within the home, so as not to undervalue those fundamental water services and the roles, duties and ‘must do’ actions that underpin them.

As part of their work exploring existing visions for water smart communities the EWSC Communities and Engagement workstream is looking at how value(s) around all aspects of water are framed, communicated and related to other potential priorities.

Case study: Comparing Ofwat Performance Commitments and Public Value Principles

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. Biodiversity Net Gain (BNG) requirements for new developments are now enshrined in the Environment Act 2021, which may introduce certain other obligations on specific sites, reinforcing this commitment. It is possible that more outcomes will form part of the Performance Commitments in future, but is likely that this will result from obligations placed on the industry, as has happened with BNG, rather than being mandated by the regulator.

Wider societal and environmental outcomes beyond the Performance Commitments are the focus of the Ofwat Public Value Principles. They reflect a positive strong shift within the water industry towards more outcomes-led approaches. Ofwat describe these as ‘a framework to help guide’ water companies, who ’… 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. Given the remit, duties and powers of the regulator and their role in protecting customer interests, the current approach is not to mandate but to ‘encourage’ companies to deliver this wider value. Ofwat emphasise that delivery of social and environmental value outcomes should not come at greater cost to customers without customer support. The approach is having positive ripple effects across the industry with many of the larger water companies embracing the Public Value Principles and taking a more purpose-driven approach to creating and demonstrating value through their work.

The difference between the Performance Commitments (must do, mandatory) and the Public Value Principles (should do, strongly encouraged), highlights the challenge for regulators in balancing service delivery, efficiency and affordability with a drive towards wider value creation.

Though the examples above take a primarily water perspective, similar challenges are faced within the housing and development industry as discussed in more detail in our Housing Challenges Article. For example, the Homes England Strategic Plan sets out a strong vision for delivery of new homes including strategic objectives to support and enable ‘vibrant and successful places’, ‘high quality homes in well-designed places’ and ‘sustainable homes and places’. In practice, not all of these outcomes are enshrined in legislation or regulations, meaning that some cannot be enforced. Instead, delivery relies on local planning policy, and more often a combination of market factors and incentives, developer organisational values, and collaboration between local stakeholders.

6. Maximising wider value creation through definition of ‘must do’ action

Acknowledging the value of these core water-related services doesn’t mean being complacent about the way that they are provided. 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.

Recognition within the infrastructure sector that singular technical solutions or discharging duties in isolation can miss opportunities to deliver wider value has resulted in trends towards more holistic approaches and that deliver wider outcomes. The shift towards delivery of infrastructure in a way that maximises wider value is discussed further in our EWSC Insight articles making the value case for action towards wider outcomes and water companies as place-based anchors.

There are certain areas in which delivery of ‘wider outcomes’ has been become mandatory for water and housing sectors through new legislation and regulations, for example:

• The Social Value Act 2012 is 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 private water companies.
• National legal commitments for Net zero targets are having ripple effects across water housing and all sectors. Local Authorities are required to set targets for reaching net zero. In many areas, including within housing, targets remain voluntary rather than mandatory, with organisations choosing to set their own targets. National and local government targets do indirectly influence steady tightening of building regulations and planning enforcement. Within water sector specific expectations and requirements are introduced by inclusion of operational net zero carbon within Performance Commitments.
• The recent Environment Act 2021 mandating delivery of Biodiversity Net Gain for new developments is another example of system-scale action driving positive change through the planning system with a major impact on the development and water sectors.
• 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’. The Act, initially only imposing duties on public sector, is already influencing the overall delivery environment, including shaping Welsh Water’s commitments and accelerating the implementation of Schedule 3 on SUDs in Wales. A similar act for England is now passing through the House of Commons, which, if passed, may positively impact actors’ roles and duties.

These examples demonstrate how new ‘must do’ actions can have immediate impact and significant positive ripple effects, provided unintended consequences are carefully considered. In other areas, however, the government and regulators have been cautious, particularly in England, when dealing with the private sector. It’s important to acknowledge that this perceived caution can be a result of the particular remit and function of industry regulators such as Ofwat. Local Authorities face similar challenges when considering, for example, balancing pressure to unlock private sector housing with a desire to achieve better outcomes by imposing higher design standards or securing planning gain. The diagram below illustrates some of these issues by comparing — schematically — two different actors within the system.

Schematic diagrams comparing current ‘must do’ obligations for a typical water company and local authority within the context of a holistic wider outcomes framework. The diagram indicates water-related obligations in the centre and roles in delivering ‘wider outcomes’ around the outside. Image Source: Arup.

The above diagrams are simplified snapshots of a complex delivery context, but they illustrate the different roles individual actors can play within the wider system and differing levels of agency to influence outcomes. The diagrams also highlight importance of a strong individual value case to enable delivery of more non-mandatory outcomes.

It is clear that within a complex system individual actors cannot deliver all outcomes on their own, nor would this be appropriate. There is a need for actors with overlapping or complimentary roles and priorities to work in partnership if comprehensive place-based outcomes are to be delivered with limited resources. The importance of resilient governance models to underpin partnership working and collaboration is discussed further in our articles on stewardship.

This article has highlighted the significance of ‘must do’ obligations and how they motivate action. 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.

The discussion raises a number of questions and areas for further consideration:

• Are the core obligations of different actors best defined to maximise transformation towards water smart communities?
• Where might ‘must do’ activities be extended or assigned to different types of organisations to maximise impact?
• Where might strictly defined roles and obligations be restricting innovation through the imposition of ‘can’t do’?
• To what extent should we further mandate the creation of value and wider outcomes through these core roles and duties
• Where should imposition of ‘must do’ activities be balanced with other possible approaches? Where might other incentives, mechanisms and value models be more appropriate than mandatory/regulatory directives?

Some of these themes are being explored by the EWSC. The article making the value case for action towards wider outcomes looks further at the importance of values and in particular the value case for action beyond ‘must-do’ obligations.

This article is written by Arup, a collective of designers, architects, engineering and sustainability consultants, and experts dedicated to sustainable development. Arup brought water and housing specialisms together with strategic design capabilities to rethink how we define values, assets and stewardship to unlock opportunities for enabling Water Smart Communities (EWSC). This is one of three on the topic: see Rethinking Value; and Making the value case for action towards wider outcomes, for more.

As Discovery research lead and series editor, Arup’s Transformation & Design Studio led the multi-partner research effort contributing public innovation and strategic design expertise.

This is one of a series of insight articles produced as part of the EWSC innovation programme, exploring how integrated water management can be delivered through innovative housing and stewardship models. To explore related articles and reflections browse our publication. For an overview of the project, latest news or to get in touch visit https://www.ewsc.org.uk/.