Financial transparency provision added to Special Measures Bill

Water companies will be required to produce an accessible, public-facing overview of their financial position at least once a year under a new provision in the Water (Special Measures) Bill.

Water minister Emma Hardy last week secured Commons agreement for a new government amendment to address concerns raised in the Lords about financial transparency. She said that while water companies are already required under their licences to report on financial performance as part of their annual performance reports, “Government recognise that there is an opportunity to make financial data more accessible for members of the public. The Government have therefore worked at pace with Lord Cromwell and Ofwat to develop a way to achieve our shared objective of improving the transparency and accessibility of reporting on key financial metrics.” 

Hardy said the insertion of a new section 35E into the Water Industry Act 1991 will make it clear that water companies should provide an “intelligible overview” of their financial position at least once a year, posted in a prominent place on their websites. This must include a summary of significant changes that have taken place over the past 12 months, and key aspects such as their share capital and debt.