Ofwat’s 2019 price review is a prime opportunity for water companies to drive up efficiency and productivity, thereby ensuring the sector can deliver the kind of services customers will expect in the years ahead.
Speaking at a recent workshop for water companies, Ofwat Senior Director, David Black said that “the combination of focus on customer, outcomes and totex” in the forthcoming 2019 price review means “huge scope for productivity gains in the sector.”
David Black also told companies: “it is clear that the totex and outcomes framework can deliver even more in the next control period than the current period.”
Referring to the public scrutiny facing the water sector, David Black said: “water companies have a strong interest in demonstrating that they can stretch to deliver and that business plan reflects company aspirations to deliver more, deliver better and deliver more efficiently.”
The workshop was also presented with the results of an analysis conducted by KPMG and Aqua Consultants on behalf of Ofwat, to look at how totex and outcomes are helping companies become more efficient. The analysis reveals that where companies use totex and outcomes to take alternative approaches, they typically save a third on costs compared to more traditional methods. Looking to the next price review, evidence suggests that water companies could cut costs by between 5% and 17% by the end of the next control period. Water companies are invited to comment on the results of the KPMG/Aqua Consultants analysis; the deadline is 29 March.
Ofwat Press Office:
Fintan Hastings, Senior Associate – Media Relations
Tel: 0121 644 7642
Email: [email protected]