Peers question Outcome Delivery Incentives regime

Peers challenged the efficacy of the Outcome Delivery Incentives (ODI) regime during an oral question in the Lords last week.

Baroness Hayman of Ullock noted Ofwat had penalised 11 water companies in October for failing to meet targets including on pollution incidents. She asked Defra’s minister of state Lord Benyon: “Does he believe that the current sanction, which sees failing companies having to repay customers a proportion of their bills in future years, is enough to bring about the improvements that we so desperately need? With this in mind, how does he respond to the suggestion by Ofwat’s newly appointed chair, Iain Coucher, that the regulator should be granted powers to debar the directors of egregious water companies?”

Baroness Bakewell of Hardington Mandeville argued: “It appears that the threat of financial penalties is insufficient to encourage water companies to change their damaging environmental practices. Are the Government ready to propose more stringent means to ensure that water companies invest in infrastructure rather than directors’ bonuses?”

Lord Benyon did not pick up the debarring point, but highlighted that more investment has been mandated, notably on storm overflows, and that ODIs were but one form of penalty in play, with regulators having wider enforcement powers.