Industry chief calls for regulatory overhaul at activists' conference

Chief executive of Southern Water, Lawrence Gosden, told a recent gathering of environmental activists that while it was right that the sewage scandal should fall at the water companies' feet, “it is the entire regulatory system that needs to change”. At the same event, Environment Agency chair, Philip Duffy, shared his fear that customers may not take seriously their part in reducing demand. 

Gosden said there was “no consensus about certain topics” between the industry regulators. “The entire regulatory system needs better alignment, better dialogue, better engagement and modernising to tackle the big solutions we are going to need,” he said. Gosden was speaking in a panel session during a conference convened by the South East Rivers Trust. 

Chair of the session, River Action chief, James Wallace, said: “It’s the view of the organisation I belong to, and probably many in this room, that we are in the middle of a freshwater emergency.” He added: “We appreciate a chair of a water company being in a public situation answering what will be difficult questions.”

Wallace put to Gosden: “What I’m hearing is a lack of transparency and trust perceived by the public and aimed towards the regulators and the industry… what’s your plan to go out to your customers as a leader to try and bring about a change? Gosden said: “I’ve been super clear: the company I now lead, its performance has until now been totally unacceptable and I apologise sincerely for that history. I own the history – I didn’t create the history, but I own it. Trust and transparency is going to take time. Public mistrust has gone back to where we were 30 years ago.”

He went on: “I have put in place a turnaround plan to get the company back to where it should be within the current regulatory system. That plan only gets us back to base one. There is a mountain to climb in terms of the work required to secure a water supply for the future and to save the environment at the same time. And it is urgent.

“And what has to be done at the same time? We can’t conclude this and only clear up sewage in the rivers and only deal with water, because water quality in the rivers won’t have changed. It needs all the organisations in industry and agriculture, and water companies, local authorities, and road systems all making progress at the same time otherwise this is going to take too long.”

Fellow panelist and activist, Feargal Sharkey, said: “Leakage and demand reduction are not going to happen  because we need to deal with the fundamental issue: trust simply doesn’t exist. I have no faith and trust in Defra and politics, no trust in the regulator and the industry.” Sharkey went on to declare he saw “a complete lack of strategic planning, thinking, political oversight, and leadership… it’s not here now and I’m not sure I can see it on the horizon.”

On the same panel, Duffy, speaking about the threat of over-abstraction, said: “Our fear is that [the industry] doesn’t take this seriously and imagine that if they don’t get the infrastructure they can just carry on abstracting.” On demand reduction he added: “Are we serious as a country about this? Because in these plans we have got in front of us there is quite a lot of hope that consumers will bear the brunt by reducing consumption. Is that a credible pathway? We don’t see much evidence historically of consumers reducing consumption. Even though the industry tries very hard to make them do that.”