Ofwat urges water firms to ‘step up’ to future challenges

Ofwat has called on water companies to “step up” to the challenges which face the sector, such as a growing population, higher customer expectations, and the threat of climate change.

Ofwat chief executive Cathryn Ross

The regulator has published its five-year business plan – the second to be made publically available – setting out its overall approach for delivering its strategy, ‘Trust in water’, over the next five years.

“If we are to build and maintain trust and confidence, then the companies we regulate need to respond to changes in customer and society’s expectations,” the report said.

“This means they need to take more responsibility (step up) for delivering the services that their customers and wider society want – and customers are willing to pay for.”

Ofwat said companies must do this by:

being more focused on customers and responsive to their needs

becoming more open and transparent

having strong relationships with everyone they work with – from communities to suppliers

challenging themselves to work differently to provide better services for less

make sure that financial performance is closely linked to delivering what customers want

making better use of scarce resources, protecting our natural environment and making sure services are resilient

IMAGE: the future challenges facing the water sector

Source: Ofwat

“Our approach to regulation will support companies to be more agile and responsive – and allow us to step back where monopolies step up or customers can shop around,” Ofwat said.

“But if companies do not step up to the challenge or struggle to adapt and progress, we will be ready to step in to make sure customers’ and wider society’s interests are protected.”

The regulator also laid out its own priorities for 2016/17:

1. Working to ensure that markets deliver real benefits for customers, the environment and society.

2. Improving information and accountability.

3. Maintaining customer confidence through a period of change.

4. Maintaining investor confidence in the sector through a period of change.

5. To ensure that Ofwat has the skills, experience, systems, processes and culture that support our new strategy.

“We continually review what we do to make sure we are delivering the right things in an efficient way,” the regulator said. “And we update our business plan every year so that we always look five years ahead. Our plan may change significantly from year to year, as circumstances change and our priorities evolve.”

IMAGE: the water cycle