Climate change is affecting the quality and quantity of our raw water supplies collected in reservoirs and abstracted from rivers.

Between 2006 and 2009 South West Water promoted a series of actions to develop responses to the issue of water quality based on moorland restoration on Exmoor and reducing soil loss and pollution from farms.

Exmoor and Dartmoor have been changed significantly in the last hundred years by ditch construction and drainage schemes. The purpose of these grant-aided projects was to improve the land for agricultural purposes, but loss of natural water storage has led to significant erosion, carbon dioxide release from drying peat, biodiversity loss and increased downstream flood risks.

A restoration project was started on Exmoor in 2003 by Exmoor National Park Authority -South West Water provided additional funding from 2006 onwards.

To date over 300 Hectares of moorland have been restored with a wide range of hydrological and environmental benefits.

Any changes in grazing yields are offset by support payments from Natural England to the landowners involved.

A group of 15 farms were improved above one of our most damaged reservoirs, Upper Tamar Lake, near Bude. Similar techniques were undertaken to the England Catchment Sensitive Farming Delivery Initiative, with funds provided to reduce soil erosion, loss of manures and damage caused by the access of stock to watercourses. Within six months, water quality below the farms was of better quality than the water above but, at the same time, farm productivity and incomes have also been raised. This proved that natural water quality improvement was occurring as farms were not losing their soil and fertiliser.

A more extensive programme of changes to uplands and farmed land was promoted in the last Period Review with support from the regulators, Ofwat and CCWater. South West Water is now implementing a 3,000 hectare restoration on Exmoor, a 100 hectare trial on Dartmoor and seven catchment scale farmland improvements above key intakes and reservoirs.

This programme of water quality and quantity protection is branded as ‘Upstream Thinking’. It avoids costly longer-term water treatment upgrading and, when assessed over 30 years, offers a benefit to cost ratio of 65:1 or better. Our downstream customers are offered the prospect of lower bill increases and ‘soft engineering’ for flood protection to complement essential conventional defences for urban areas and our key assets such as water treatment works adjacent to rivers.

The current improvement programme for moorland and catchments raises £8.8m for local projects to restore the natural water storage ability of uplands and limit the damage to rivers from farmland from 2010 to 2015. These projects are included in the South West River Basin Management Plan as they will contribute to ‘Good Status’ delivery for the Water Framework Directive. The cost to our water customers is an additional 65p on bills by 2015. We are in partnership with environmental charities including the Westcountry Rivers Trust, the Wildlife Trusts and FWAG as they have the expertise for moor and farmland improvements. This private company/ charity sector link is a new approach compared to centrally directed regulation and, we believe, is more efficient and cost effective.

In preparation for the reform of the Common Agriculture Policy and the next Periodic Review we are working with Natural England and our stakeholders to design a practical method of making eco-system service payments to reward best land management practices above our principal water sources. Farmers will develop several income streams to improve the viability of their businesses.

We are confident that our wider catchment management approach matches many of the aims of the Natural Environment White Paper and will be making a full and supportive response to it. Increasing food security while protecting water quality, improving biodiversity and dealing with climate change threats are achievable, through the actions we have designed and are delivering with our partners through Upstream Thinking