So You Want To…… a reservoir

In addition to securing a water supply, a new farm reservoir can add capital value to a business and give farmers a marketing advantage, says Stephen Locke of Berrys, Shrewsbury, who is advising an increasing number of farmers on reservoir planning. In addition, reservoirs reduce the variability of and reliance on summer abstraction licences.

Where do I start?

Assessing water requirements and water availability accurately are the essentials. The Environment Agency can help with flow levels and availability in your area but in some cases an independent assessment is also advisable.

At this early stage, think not only about the immediate requirement for water, but also about the longer term development of the business and what future requirements might be.

For example, should the reservoir have capacity to carry water over from one season to the next in case of shortages, to expand production or trade water?

Will I need planning permission?

Yes, and this is becoming more time consuming and costly. The EA, Natural England, archaeological, public and other interests need to be consulted. An Environmental Impact Assessment may also be needed.

“The difficulties encountered in obtaining planning permission and concerns over flood and ecology risk have made the whole process far more complicated in recent years,” says Roy Brain, managing director of consulting engineers, Calvert Brain & Fraulo.

“Some councils apply planning rules more strictly than others.

“It is important to establish that planning approval can be obtained prior to committing significant funding to investigation, reporting and detailed design.”

Risk of flooding is high on any list of concerns. “It has to be proved that local residences are not at risk in the event of a flood. While it is highly unlikely 60m of a built bank will fail, it is easier to obtain planning permission if homes and infrastructure are not compromised.”

What other permission or legislation is involved?

An abstraction licence will also be needed – the EA is keen to support farmers moving from summer to winter abstraction.

How much will it cost?

This depends on the site and the soil – clay-lined reservoirs are far cheaper than plastic-lined. Reservoirs can be of varied construction:

 Granular or chalk embankment – plastic lined

 Granular or chalk embankment – clay lined

 Basin excavation and embankment constructed in clay

 Re-profiling of disused/worked out quarries lined with clay

Budgets need to factor in cost of planning permission, environmental assessments, cost of licences and professional fees as well as construction costs.

Norfolk-based Calvert Brain & Fraulo has been involved in the design and construction of more than 25 farm reservoirs since 1995. Mr Brain estimates that a typical 75m gallon plastic lined farm reservoir will cost between £450,000 and £500,000 including fees but clay-lined reservoirs can cost significantly less.

“We will always hunt for clay at a farm, because if there is a plentiful supply, its use negates the need to pay for a plastic liner.”

How long does it all take?

Allow a minimum of two years from concept to commissioning – a more realistic estimate is three years, says the Environment Agency.

Summer is the best time for the construction work to begin but schemes sometimes have to be held over until the next year because planning and environmental assessments take longer than expected.

Timing of build is important, says Mr Locke – most good contractors are booked up years in advance.

A 30m gallon reservoir, depending upon whether it is lined or not, typically takes between eight and 14 weeks to build given reasonable weather conditions, says Mr Brain.

What legislation affects reservoirs?

The Reservoirs Act 1975 is the main legislation, dealing mainly with safety aspects of reservoirs with a capacity of 25,000 cubic meters above natural ground level.

Responsibility for reservoir safety lies with the owner and is enforced by the EA.

A construction engineer maintains responsibility for the reservoir up to the issue of a final certificate not less than three years and normally not more than five years after completion of construction.

After this a panel engineer must be appointed to re-inspect the reservoir and issue reports and certificates periodically.

For smaller reservoirs (less than 25,000 cubic metres) regulation is through the Health and Safety Executive and Local Authorities.

What sites are suitable?

Advisors suggest choosing more than one potential site, taking in practical issues as well as soil type, location of site within area to be irrigated, access and services, environmental and archaeological designations, local housing, rights of way, visual impact and any, underground services which may be disrupted.

Can I get a grant?

A new large grant scheme expected to be launched shortly will cover reservoir funding of between 25% and 40% of costs.

Can I get tax relief on the cost?

Unlike slurry lagoons, farm reservoirs are not eligible for tax allowances, nor are the sluices gates and generators associated with them, says David Missen of accountant Larking Gowen.

But the irrigation equipment used to distribute the water within the reservoir will normally be eligible for capital allowances, as fixed plant in a structure or just as ordinary plant and equipment.

If the circumstances are right, it might be possible to put funds into a self-invested pension fund which would build the reservoir and rent it to the business, which could give the tax relief indirectly, suggests Mr Missen.

However the kit would not qualify in this sense as pension schemes cannot own plant and machinery.

Will it add value to my farm?

Availability of irrigation can add up to £1,500/acre to the value of land but it is not just a simple matter of asset value, stresses land agent James Brooke of Bidwells, Cambridge.

The ability to manage quality as well as quantity was increasingly important too.

“On very light land or blowing sand, irrigation is fundamental rather than desirable.

“I think that in future land with irrigation will be increasingly valuable as we move from supported to more diverse cropping.”

Land that had the ability to diversify its range was already preferable among investors, he said.