This site uses the UK Government AccessKeys system
|
|
What's new | Publications | Media centre | Price review | FAQs Update alerts | Consumer issues | Site map | Competition | Contact us |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Letters to Regulatory Directors
RD 34/03 12 September 2003 Dear Regulatory DirectorPERIODIC REVIEW 2004 COST BENEFIT ASSESSMENT FOR "CHOICES WILL BE MADE" AND "SUBJECT TO POLICY DECISIONS" SCHEMES: THE CONTEXT AND METHODOLOGY 'Initial guidance from the Secretary of State to the Director-General of Water Services (January 2003) and 'Initial Guidance on Periodic Review 2004 (PR04) from the Welsh Assembly Government' (March 2003) indicated that the costs and benefits should be assessed for schemes falling into the "choices will be made" and "subject to policy decisions" categories. Over the past few months DEFRA, the Welsh Assembly Government and regulatory bodies have worked together to develop the process used to assess the benefits and compare them with the costs of proposed environmental improvements. The Environment Agency has been assessing the potential benefits accruing from these schemes. With the receipt of the draft business plans Ofwat has started the analysis of the cost estimates provided by the companies for delivering the schemes. These costs will be compared with the benefits. The benefit and cost information will be provided to Ministers to inform their decisions on the scope of the environment programme for the period 2005-2010. These decisions will be reflected in the Secretary of State's principal guidance to be published in January 2004. The Welsh Assembly Government will publish similar guidance in relation to Wales. The Environment Agency will provide draft results of the benefit assessment in mid September and will provide combined costs and benefits in early October. This information will be provided through their AMP4 regional co-ordinators. Ofwat will share with the other regulators the outcome of its analysis of the costs of the proposed assets improvements. We will also feed back the results of the cost analysis to companies and provide queries regarding these in early October 2003. The Environment Agency and Ofwat have prepared two papers setting down this methodology to inform companies and stakeholders of the basis for the benefit cost assessment. One paper prepared by the Environment Agency 'Economic Appraisal for the Environment Programme in PR04' explains the overall economic analysis of the environment programme, that provides the context for the cost benefit assessment of "choices will be made" and "subject to policy decisions" schemes. This paper is available on the Agency's web-site (www.environment-agency.gov.uk). The methodology that we will use in the analysis of the costs is given in 'Ofwat methodological framework for calculating the present value of scheme costs to contribute to cost benefit appraisal'. This paper has been placed on the Ofwat web-site (www.ofwat.gov.uk). Please contact Jonathan Fisher at the Environment Agency (jonathan.fisher@environment-agency.gov.uk) or Giordano Colarullo at Ofwat (giordano.colarullo@ofwat.gsi.gov.uk) if you have any query or comments on the papers. Yours sincerely ROWENA TYE Head of Quality Enhancement  |
© Crown copyright |
Disclaimer & Privacy Statement |