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Within five days this December, companies will know their fate on prices and public ownership.

Buckle up for mid December, when two pivotal decisions for the water industry’s future will come within the space of five days.

The result of the general election on 12 December will either press the button on, or put to bed, the threat of re-nationalisation that has been hanging over the sector for the past 18 months.

We may see more clarity from Labour in advance of that, if its manifesto sets out the exact tune to which it plans to compensate shareholders for their water company equity. At the time of writing, there had been

Resourcing multiple referrals is clearly something the CMA has given some

thought to already, which suggests that more than a typical number of water appeals wouldn’t altogether come as a surprise. 

nothing new, except the possibility of broadband being added to the list of public ownership targets. Meanwhile, advocates of the private model, including the CBI and Water UK, had a final flourish at demonstrating why, in their view, re-nationalisation would be costly and damaging

It ain't broke

A review of the changes needed in utility regulation by the NIC warns: “We can’t afford to get this one wrong.” But exactly who can’t get it wrong?

Summer 2009, and one of the UK economic regulators had concluded that the market it regulated: “Had delivered secure supplies for some 20 years. But there have been changes in recent years, some of them quite profound, with still more testing challenges to come.” The testing challenges included an 80% reduction in carbon emissions by 2050. And it pledged that it would be “guided by consumers’ interests and all other aspects of sustainable development.”

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That regulator was Ofgem during its Project Discovery that morphed ultimately into its Revenue = Incentives + Innovation + Outputs (RIIO) regime for network regulation.

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Skip forward a decade and this month the National Infrastructure Commission (NIC), having looked at the three economic regulators – Ofwat, Ofgem and Ofcom – has this to say in its report of its findings: “The current system has yielded unprecedented and much-needed investment in the utilities we all rely on, with improved outcomes for the public in recent years. But it was designed for different times.”

OK, so we’ve been here before. But does it tell us any more than plus ca change about regulation and policy? 

From resources to resilience

Water Resources South East kicks of work on a multi-sector regional resilience plan.

“Urgent, serious and complicated” was how Water Resources South East's (WRSE's) independent chair, Simon Cocks, described work to create a multi-sector regional resilience plan for the South East. WRSE has been coordinating water resource planning across the region for over two decades. That’s been challenge enough, but things have just got a lot more complicated. The changes have been driven by climatic and growth challenges and facilitated by increasingly supportive policy, including the National Framework which will coordinate the work of the five regional water groups.

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Chairing the launch event for the plan, Energy & Utility Skills chief executive Nick Ellins highlighted the sense of “talking to people in peace not war”. He was recalling the “numbing” scale of the 2012 drought, and the “absolute beating” the sector took from the media. Cocks added that with the scale of the challenge now laid out for all to see by the National Infrastructure Commission, the drive towards regional planning had progressed quickly and with conviction.

There still seems to be a hierarchy between the needs of consumers and

and the economy, and looking after the environment.”

A river runs through it

INDUSTRY COMMENT

Critics say leakage, combined sewer overflows, pollution and excessive abstraction are linked and symptomatic of an uncaring industry. Ian Barker says this will put the breaks on calls to reduce personal consumption.

A few years ago, a water company chief executive said to me “Running a water company would be easy if it weren’t for the customers”. Thankfully that attitude is now history, and all companies work hard to put customer service at the heart of their operations.

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But just because a company scores well on dealing with queries and complaints misses an important point: some of their customers will still be highly critical because of concerns relating to their wider interests. Whether it’s angling, wild swimming, ornithology, or angst about pollution, customers who are otherwise happy become ferocious critics on social media and elsewhere when they become aware of an issue that affects them. They see that in the past 20 years there has been little discernible improvement in four key areas of companies’ operations.

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