Aileen Armstrong, Senior Director, Company Performance and Price Controls at Ofwat, is warning that current concerns and headlines in the media about the UK water sector are not going to go away without real change and that the pressure is only going to intensify over the coming months.
In a speech to delegates at the Westminster Energy Environment and Transport Forum, she said:
“When everyone is talking about water and sewage it’s vital that company CEOs are front and centre. Public accountability includes being seen and heard when the media is discussing the issues that matter to the public and for the environment.
“We all need to recognise that these concerns and headlines are not going to go away without real change. And I think the pressure is only going to intensify over the coming months.”
She introduced her speech – Next steps for regulation – challenges, opportunities and building on the PR24 draft methodology – by saying:
“I don’t think we’ve ever seen such focused attention on the sector. The headlines tell the story (including) :
- outrage about leakage levels when hosepipe bans are introduced
- river water quality
- questions about how our future water needs will be met
- ongoing anger over sewage outflows
- the impact of investment plans on future bills
“No surprise to see anger about performance related bonuses”
“Against that backdrop, it’s no surprise to see anger about performance related bonuses, ” she added. According to Armstrong, the headlines give a picture of what people expect from their water and wastewater services, together with reflecting a sense that “companies aren’t always being run in the interests of their customers and the environment.”
“It’s clear that companies’ current performance isn’t meeting those expectations …and clear that some companies’ behaviours are undermining trust and confidence in the sector,” she told delegates.
Four key areas with opportunities for transformational action
The director highlighted four key areas with opportunities for transformational action:
- improving companies’ current delivery for their customers and the environment
- opportunities for transformation through open data
- really effective strategic long term planning
- innovating to rise to the affordability challenge
Essential companies take every opportunity to demonstrate behaviours that the public expect
Commenting that Ofwat had always regulated the sector with a focus on the long term, enabling investment to be made when needed, “but with payment for that investment shared with the future customers who will also benefit from it.”
She concluded by telling delegates:
“The long term delivery strategies that companies will produce for PR24 will not only drive better planning and evidence to help identify the key actions that need to be taken by companies in the next few years. They’ll also help us to hold companies to account in consecutive review periods for the money they have received from customers. ….
“we intend to make greater use of measures to help track delivery and keep companies on the hook to deliver their programmes of investment….
“And it’s essential that companies take every opportunity to turnaround performance, be accountable, and demonstrate the behaviours that the public expect. There is much still to do.”
The full story and further details can be read at Water Briefing here.