Ofwat’s chairman, Jonson Cox, has today called on the water sector to “hit refresh and offer a renewed commitment to customers”.
Speaking at the Water UK City Conference 2018, Jonson Cox said the water sector should view the current scrutiny it faces as an opportunity for renewal.
Despite some good progress, Cox warned: “now is not the time to sit still and look back at all that’s been achieved.” “I don’t think the sector has gone far enough. A renewed effort is needed,” he said.
Addressing customer concerns, Cox went on to say: “what must customers feel about the headlines we’ve all read recently? They read of high dividends, high debt, complex holding company structures and off-shore companies.”
Customers do not, Cox warned, “have the sense that their water company is on their side, but rather that it is more interested in boosting financial returns.”
Cox further warned that “damage to the reputation of the sector is caused by companies who have what the public see as inappropriately aggressive financial structures for a public service utility.” Responsibility for fixing this must sit, Cox said, “squarely with the relevant companies.”
The sector must, Cox said, think in terms of the renewal of this public service, where customers and society come first.
In closing, Cox urged water company investors and executives to be “right on the front foot trying to contribute urgently and positively to Ofwat’s programme.” There is nothing in this he said, for a responsible long-term investor to fear.
In December, Ofwat published the methodology for the upcoming price review in which it set out plans for the lowest ever cost of capital for a regulated utility, which could lead to a decade of falling water bills.