Over the past few years, the scrutiny and criticism of water companies has grown exponentially. Well organised pressure groups, national media campaigns and engaged politicians have driven much of the conversation about the sector. For those working in and around the industry, it was clear the growing public, media and political pressure was not sustainable, and in October last year the Government tasked Sir Jon Cunliffe with addressing the fundamental structural issues within the sector.
Published last week, the Independent Water Commission’s report offers the opportunity to draw a line in the sand for the sector to reset and set about rebuilding public and stakeholder trust – something that will be vital in helping to meet our needs from the most vital of utilities.
What is the Commission proposing?
Arguably the most headline grabbing recommendation, and something the Government has described as the biggest shake-up of the industry since privatisation, is the scrapping of Ofwat and the Drinking Water Inspectorate. The Commission has instead recommended creating a single integrated water regulator for England and Wales to streamline regulatory processes and improve efficiency.
The report recommends introducing regional system planners responsible for producing cross-sectoral spatial plans that ensure the water system delivers outcomes that benefit society, both now and in the future.
In a similar vein, the Commission recommends the Government publish a long-term National Water Strategy. With increased demand for water, whether from data centres, farming or population growth, the cross-sectoral strategy should set out how the competing demands for water are managed properly.
A key criticism often levelled at the industry is the lack of investment and management of its assets. The Lib Dems, who have been particularly vocal on this issue, found that leaks from just four companies amounted to over 1 billion litres a day. This is in part why the report calls for a new approach to how water infrastructure is managed, including new requirements for companies to map and assess their assets with new resilience standards.
The current system of support available to customers has been described by the Consumer Council for Water as a “postcode lottery”, with an enormously variable patchwork of support available depending on where people live. To overcome this, the Commission recommends the introduction of national social tariff, providing consistent levels of financial support for customer across England.
Restoring trust
Earlier this year we launched our Authenticity Index, based on four elements – ability, authority, accountability and alignment – to assess how authentically a brand or sector is perceived. Just 18% of those polled thought water companies were authentic.
In his speech launching the report at the London Museum of Water & Steam, Sir Jon echoed these sentiments, setting out that the industry hasn’t met expectations or maintained trust with the public.
One of the nearly 90 recommendations set out by the Commission was for the Government to reset its approach to strategic communications regarding the water industry, that its messaging should be more balanced, and that in this it should acknowledge other polluters in the water system beyond sewage spills. The risk, as the Commission sees it, is the potential for investment and talent to stop coming into an industry under fire at a time when it needs it most.
However, this fails to acknowledge the politics at play. Increasingly, the dominant source of pollution in our rivers and streams stems from agriculture. But given the Government’s rocky relationship with the farming community, and the public’s persistent negative attitudes towards water companies, we shouldn’t expect to see the Environment Secretary looking to shift the narrative any time soon.
The recommendations put forward by Commission present an opportunity to draw a line in the sand and for the sector to reset. To move forward, customers must trust that their bills are fair and proportionate, that companies are working in the public interest, and that the sector is being regulated effectively.
