Gove and companies back Ofwat public interest reforms
Environment secretary, Michael Gove, last week gave the government’s “full backing” to Ofwat’s financial and corporate reform agenda, as companies too pledged their support.
Following a meeting between Gove and water company leaders on Monday 16th April, Water UK said the industry was “fully on board with the reform programme proposed by industry regulator Ofwat and the government’s ambitious environmental agenda, as companies look to boost trust in the sector and enhance their role in working in the public interest”.
The commitment seemed to go down well, as in a letter to Ofwat chairman Jonson Cox on 18th April, Gove reported he was pleased all companies had “committed to action in a range of areas, including tying executive pay and dividends more closely to performance improvements, sharing with customers additional gains from high gearing, and closing offshore financial structures in the coming months. They also committed to helping deliver the government’s ambitions in its 25 year plan for the environment, balancing these priorities with much needed investment in long-term resilience and ensuring bills remain affordable for customers.”
Gove told Cox: “I therefore hope that you can implement your proposals in full without the need for government intervention or legislation. However, if you find that water companies are not fully and promptly cooperating with your proposals, we are ready to revisit how government can give Ofwat stronger powers to amend licences, through legislation if necessary. Moreover if you find there is any need for government intervention or legislation beyond your current proposals, we will carefully consider any further recommendations.”