To ask the Secretary of State for the Environment whether he has received second responses from the Southern water authority and the six water companies concerned to the Monopolies and Mergers Commission's report on water supply in the Southern water authority area; and if he will make a statement.
I have received the responses. I can confirm that Southern water and the six water companies, namely, Eastbourne, Folkestone, Mid Kent, Mid-Sussex, Portsmouth and West Kent have made real progress in taking forward the recommendations made by the Monopolies and Mergers Commission. The MMC report stated that Southern were on the whole effectively managed and compared satisfactorily with other public sector bodies. The second response from Southern is thorough and detailed. It has also been positive and constructive and has illustrated well its continuing commitment to improving management and efficiency. The response is most encouraging following Southern's record of achieving recent performance aims.Good progress has been made on the setting of regional standards of service, including water supply, sewerage and water quality, culminating in the issue of a standards of service booklet, while survey work on establishing shortfalls continues. The costs involved in rectifying these should be fully assessed by the summer of 1988.Southern water's overall record on cost reduction is good, and demanding future performance aims have been set. It has also taken forward the MMC'c recommendations on the management of capital projects, and has reviewed and amended its capital projects procedures.The six water companies have generally continued to make progress, particularly with corporate planning, with the exchange of information on levels of service and the setting of medium term quantified targets for meeting service standards, and for cost control.Although the companies have shown good progress in their work on corporate planning, it is important that they ensure that current levels of service are identified and clear objectives set for the future.I have placed a copy of the second responses in the Library. I shall also draw the attention of other water authorities to the second response from Southern water and invite them to consider the extent to which these responses might be appropriate to their own operations.The final response from Southern water and the six companies will be required in April 1989. It will be a final progress report on the recommendations as a whole recording what has been done and setting out the improvements achieved in accordance with the commission's recommendations.