IB 10/15 Reliable services central to sector’s relationship with customers

Ofwat said today that providing customers with reliable water and wastewater services needs to be at the heart of the sector’s work, both now and in the future.

Ofwat is consulting now on how its regulatory framework can help water companies deliver more resilient services. While companies have made steps in understanding customer priorities and furthering resilience as part of the 2014 price review, there is still further work to do. Risks to services are changing and increasing – for example environmental pressures, population growth and changes in consumer behaviour, and the impacts of climate change.

The consultation focuses on:

  • creating the right regulatory framework to enable, incentivise and encourage water and wastewater services to put resilience at the heart of their business planning
  • resilient services and systems; not just pipes and networks but also corporate systems and ecosystems
  • how the sector can become more flexible and sustainable through better use of available resources

Cathryn Ross, Chief Executive said:

“Delivering resilient services to customers is important if companies are to build and maintain trust and confidence in this vital public service sector.

“The sector has made good progress but there is more work to do to make services and systems resilient – including ecosystems and financial and corporate systems. We need to ensure our framework informs, enables and incentivises service providers to make the best decisions for their customers now and in the future, while using resources sustainably. This will require creative thinking and excellent understanding and management of risk – ensuring that resilience is at the heart of what they do, not an add-on.”

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Notes to editors

  1. The Water Services Regulation Authority (Ofwat) is the economic regulator of water and sewerage companies in England and Wales. Its role is to help the sector build trust and confidence with customers, the environment and wider society. It exercises its powers in a way that it judges will protect the interests of consumers, promote value and safeguard future water and sewerage services by allowing efficient companies to carry out their functions properly, and finance them.
  2. The consultation closes on 28 August ahead of Ofwat confirming its final approach by the end of the year.
  3. The Water Act 2014 gave Ofwat an additional primary duty to further the “resilience objective” in the water sector
  4. The new resilience duty is in addition to its three other main duties:
    • further the consumer objective to protect the interests of consumers, wherever appropriate by promoting effective competition;
    • secure that the functions of each undertaker (that is, water company) are properly carried out and that they are able to finance their functions, in particular by securing reasonable returns on their capital; and
    • secure that companies with water supply licences (those selling water to large business customers) properly carry out their functions.
  5. The resilience objective is defined in the Water Act 2014 as:

    (a) to secure the long-term resilience of water undertakers’ supply systems and sewerage under-takers’ sewerage systems as regards environmental pressures, population growth and changes in consumer behaviour, and
    (b) to secure that undertakers take steps for the purpose of enabling them to meet, in the long term, the need for the supply of water and the provision of sewerage services to consumers, including by promoting—

    (i) appropriate long-term planning and investment by relevant undertakers, and
    (ii) the taking by them of a range of measures to manage water resources in sustainable ways, and to increase efficiency in the use of water and reduce demand for water so as to reduce pressure on water resources.

  6. Ofwat has also set up an independent group on resilience, bringing together voices and expertise from across and beyond the sector, to consider key resilience issues. The group has already helped Ofwat develop its thinking – including the definition above. It is due to publish a final report in the autumn, which will help inform Ofwat’s final approach to resilience, and all its work.
  7. Media enquiries to Ofwat Press Office on:
    Simon Markall 0121 644 7696 / [email protected]