Cathryn Ross speaking notes – Moody’s 2017 UK Water Sector Conference, 17 October 2017

Ofwat: ‘Good morning everyone. It’s great to be here. And thanks to Neil and the team at Moody’s for inviting me. When I agreed to talk at this conference I said I’d talk about the challenges and opportunities for companies through the coming price review. I’d expected to recap on a lot of the things we have been talking about for a while – the impact of a tougher efficiency challenge from Ofwat for companies, the impact of lower financing costs, the effect of more money at risk dependent on delivery for customers, what we’re looking for from business plans…

But since I planned that speech it feels like a lot has happened. Indeed, it feels like we are now in the middle of a conversation not about how the current model for the sector could or should deliver more for customers, but about the very legitimacy of that model. The Labour manifesto for the election included a promise to renationalise the industry – a promise reconfirmed at the recent Labour conference – along with a commitment to renationalise a number of other industries. Jeremy Corbyn singled out water companies, saying, and I quote: “Take the water industry. Of the nine water companies in England six are now owned by private equity or foreign sovereign wealth funds. Their profits are handed out in dividends to shareholders while the infrastructure crumbles the companies pay little or nothing in tax and executive pay has soared as the service deteriorates”. At least for those with long memories, maybe isn’t so surprising that the Labour party is looking to renationalise. … To read more click here.

But Companies are changing tack … Yorkshire Water is apparently winding up its offshore banking arrangements which are used in the sector to manage high levels of borrowing.