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by Karma Loveday

Water UK presses government to get involved in bills versus green investment question

Water UK has called on the government to get more involved in the "toughest challenge facing the industry" – the trade off between short-term bill reductions for today’s customers and long-term investments for tomorrow.


Giving evidence to the House of Lords Industry and Regulators Committee, chief executive Christine McGourty said: "The toughest challenge facing the industry and the sector at the moment is squaring the circle on the affordability crisis and the investment challenge. There are no easy answers.”


Director of policy, Stuart Colville, said: “It is important that, while protecting the absolute independence of Ofwat, government continues to be involved in discussions about these very difficult trade-offs: which are the right environmental outcomes to be prioritising, how that fits with the affordability agenda at a time of pressure on household bills and so on. I would not want to see government think its job is done with the issuing of that very important document, the Strategic Policy Statement.”


McGourty noted: “We believe that Ofwat’s focus has been weighted somewhat too much to those short-term interests of current consumers. By 2025, bills will have been flat or falling for 15 years. The long-term investment challenge has been recognised far and wide. Ofwat has recognised the need for greater focus on the long term and we certainly welcome that.” She added: “We would like to see a greater parliamentary scrutiny role of Ofwat so that it can be held to account and explain how it is performing against the objectives set out from the Government’s Strategic Policy Statement.”


The witnesses said it was too early to say whether Ofwat’s draft methodology for PR24 – and actual price review decisions – would shift the emphasis away from bills and towards environmental investment.

Elsewhere in the session, Water UK called for simpler regulation, catchment level outcomes and more systems thinking, among other things.

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