"Significant challenges lie ahead for English water companies on service delivery, environmental improvement and transparency"
Trust is an essential ingredient for any sector – especially for water companies, given the vital public service they provide and on which we all depend.
So it is good to see the findings from the latest independent polling by ComRes, which reveals that 86 per cent of people trust their water company overall. What could be driving this?
Perhaps it is the track record of service and environmental improvements, underpinned by £150 billion worth of investment over nearly thirty years, and reflected by high overall customer satisfaction scores.
Or the fact that customers receive this high-quality service while paying on average just over a pound a day, with bills roughly where they were 20 years ago in real terms, and due to fall over the next few years.
Or the recognition of individual companies as responsible businesses by respected external organisations such as Business in the Community, FTSE4Good and the Ethisphere Institute.
But significant challenges lie ahead for English water companies on service delivery, environmental improvement and transparency, as highlighted by Environment Secretary Michael Gove, among others. The sector is diverse and the issues impact companies differently, but all are determined to demonstrate their longstanding commitment to work in the public interest.
We are seeing this in the 2020-2025 business plans which companies are preparing, covering many aspects of delivery, such as leakage, water efficiency and water poverty – and the further commitments for which regulators will press by the time the plans are finalised.
And we have seen it in the action from individual companies on company financing arrangements, the widespread support for the direction of travel of Ofwat’s agenda to promote change in this area, and the subsequent engagement on the detailed proposals.
Notable, too, are the conversations taking place between companies, regulators, policymakers and stakeholders about what more needs to be done to support the ambitions of the sector in the next few years and longer-term.
With growing customer and societal expectations on price and service, the need to do better on the environment and the challenges to resilience posed by population growth and climate change, two things are striking about the way ahead.
The first is how far water companies need to work with others – be that other companies, to encourage further transfers of water from areas of surplus to areas of deficit, or customers, to unlock the positive impact they can have through changes in their use of water.
Conceptually, none of this is new. For example, the value of catchment management – where water companies work with farmers and others to deliver better water and environmental outcomes – is well-known. What is different is the scaling up needed in future.
The second is the need to strengthen the current tools available to water companies to step up to the next level, and there is a lot we can already do in this space.
For example, work to improve the frameworks by which companies plan improvements in drainage management is at an advanced stage. And the discussion among key players on improving national and regional arrangements for water supply planning has been re-energised by the recent National Infrastructure Commission report.
But we also need to harness the role of public policy. Whether it is achieving the water aims of government’s 25-year environment plan through SuDS, better building regulations and water efficiency labelling of household appliances, or the scope for future post-CAP public funding for farmers to boost catchment management, this is a rich area of opportunity. Notwithstanding the many calls on government time, this is an opportunity which we at Water UK believe we need to seize, with the support of policy makers and stakeholders.