Like any business whose top and bottom lines are being squeezed, British Gas faces some tough decisions this year. Laidlaw has been saying since 2010 that the old utility business model is dead, and favours growth in the energy services business. Bentley was thought to be on board with this, but perhaps the change wasn’t happening as fast as Laidlaw wanted.
Moreover, Bentley has been the public face of British Gas through a time of soaring energy prices and masses of consequent negative publicity. Laidlaw may well have felt that a fresh face would go some way to wiping clean the public slate and kick-starting a change in strategy. The jungle drums are saying that further management changes will be limited – but that’s not to say the strategy couldn’t be rewritten.
It’s been a tricky start to the year for Ofwat, too – although champagne corks will have been popping at the water companies. The regulator issued an 11th-hour reprieve from its controversial licence changes at the end of last year (as revealed by utilityweek.co.uk), limiting the proposals to those necessary to facilitate retail competition. It opted for compromise (or concession, if you’re less generous) rather than taking the fight to the Competition Commission, which it had the right to do.
So, given that this public and painful stand-off had already dragged on through two consultations and several months, what changed? The appointment of Jonson Cox as Ofwat chair would be an obvious answer. Cox, a water industry veteran, assumed full responsibilities in the new post last November, and many see his steady hand in this pragmatic resolution.
Perhaps Cox and Laidlaw have reached a common conclusion. Ill-omened or otherwise, 2013 is a year without room for dissension or disagreement. As the UK utilities sector struggles to drag itself into the 21st century and deal with the competing demands of the economic gloom and the sustainability agenda, the time for discussion is over. Now, it’s all about delivery. And for anyone who gets in the way, it could be a very unlucky year indeed.
Ellen Bennett
This article first appeared in Utility Week’s print edition of 11th January 2013.
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