Industry has long been anticipating the National Infrastructure Commission’s report on regulation, but is the reality a “missed opportunity”, as some are claiming?
While deeming it “relatively harmless”, one disappointed sector player protested that the two big issues in regulation today – data and governance – had been “entirely ducked”.
They felt it would have been far better if the review into whether utility regulation is fit for the future had been carried out by the National Audit Office (which has previously questioned the effectiveness of regulators).
Alternatively, they argued, government could have drafted in the Information Commissioner’s Office, as a champion of the openness of public bodies and one “critical to future national infrastructure design”.
Despite the historic operational challenges ahead, the NIC advises against scrapping systems in place since privatisation. Albeit it calls for some hefty “tweaks”, including giving regulators powers to ensure utilities invest in sustainable infrastructure, and a tougher price control regime for monopoly companies.
If adopted, as expected, there’s no mistaking that the recommendations could mean some hard yards ahead for many in the sector, even though most saw the cost of capital, leveraging and executive salaries battles coming a long way off.
Yet the calls in the Strategic Investment and Public Confidence report for a move away from a “short-termism” culture must be welcome news for firms balancing business-as-usual with big picture demands.
The findings will certainly have gone down well with regulators, who want more options in their regulatory toolkits to tackle transforming markets and the uncertainty around net zero. This was a key issue at Utility Week Congress last week, and explored in more detail in our UOTF report.
It seems it never rains but it pours for utilities, with the report coming at the same time as a raft of other future policy road maps in recent days – from the government’s landmark environment bill, to its response to the Committee on Climate Change.
Unsurprisingly, much media focus has concentrated on the CCC document and the environment bill’s plan to bring in new powers to force water companies to work together more closely on shortages, as well as new measures to improve air and water quality.
But many within the sector will have been poring just as closely over the NIC’s vision for regulation.
Well, we did all ask for more certainty…