Reaction to the publication of Ofwat’s PR19 draft determinations has been filtering in throughout the day.
Companies have stressed that it will take more time before they are able to give a comprehensive response to the regulator’s comments but have expressed a willingness to work with Ofwat to reach agreement.
Meanwhile, wider reaction has been mixed with bill reductions welcomed but, in some cases, Ofwat urged to go further.
Company reaction
Alex Plant, director of strategy and regulation at Anglian Water: “As the company serving the driest and one of the fastest growing parts of the country, we’re confident our plan is the right one to ensure a sustainable future for our region.
“Our plan was developed and supported by conversations with many thousands of customers who were clear that we should take action to increase resilience to these challenges now, rather than wait.
“We have already provided further evidence to Ofwat to support our proposals, which Ofwat acknowledges they have yet to consider fully. We will now take the time to review the detail of Ofwat’s draft determination and continue to provide evidence to them through the formal price review process over the coming months.”
Ted Hopcroft, a water expert at PA Consulting: “There is now no doubt that PR19 will mark the biggest challenge to the industry since privatisation. Ofwat has set transformational targets in many areas. Supply Interruptions – which are notoriously difficult to predict – must fall by 64% and leakage must fall by 17%. The customer and the environment are winners with a 12% reduction on bills and £12bn for additional resilience. Incremental improvement is off the agenda – disruption, innovation and transformation will need to be the guiding principles to enable the industry to step up to this challenge, let’s hope it can be done.”
Wessex Water managing director Andy Pymer: “We will be reviewing Ofwat’s draft determination of our business plan and respond in due course.
“We remain confident that our plan, which will see lower bills for customers and our largest ever investment to maintain and further improve services, delivers the very best outcomes for our customers and the environment.”
A Welsh Water spokesperson: “We have today received Ofwat’s Draft Determination, which is a long and complex document which we will need time to consider carefully.
“On first appearance, there are clearly some significant differences between our plan – which had strong endorsement from our customers – and today’s Draft Determination from Ofwat.
“The plan we put forward sought to provide a balance between improving service, reducing bills and investing for the future.
“We are committed to delivering a plan that meets today’s and future customers’ needs and expectations. We will respond to Ofwat in the coming weeks ahead of the Final Determination at the end of the year.”
A Thames Water spokesman: “We will study Ofwat’s response in detail to understand more about its approach, so we can help to explain the benefits of our plan.
“The principles of our plan are built on solid foundations. More than one million customers engaged with us to help develop it and we’ve received 45 letters of endorsement from key stakeholders. We look forward to engaging with Ofwat throughout the remainder of this process.”
A Yorkshire Water spokesperson: “We are assessing the draft determination issued by Ofwat and will continue working with them until final determinations are made to ensure our business plan is the best it can be.”
Wider reaction
Alex Prentice, Sector Lead, Huntswood: “Ofwat has announced a series of ambitious proposals today, which clearly indicate to firms that improvements must be made in environmental protection and services for customers. As consumer expectations change and other sectors improve the way they engage with their customers, the regulator remains focused on improving resilience, minimising disruption for customers and reducing bills.
“In this context, how companies handle complaints will be a crucial factor in their ability to meet Ofwat’s expectations. Our Complaints Outlook report, released this month, finds that while 88 per cent of utility providers believe their customers are satisfied with their complaints handling, only 12% of customers report that they are satisfied. High quality service and fair pricing models form the bedrock of strong relationships and will be key in helping to address this perception gap and delivering on Ofwat’s targets.”
Tony Smith, chief executive of the Consumer Council for Water: “It’s good news that most customers will see their bills fall even after inflation and that Ofwat has responded positively to our long-standing challenge to be much tougher on companies’ financing costs and performance.”
“Not everyone will see their bills fall when you add inflation and customers need to be told how much Ofwat’s financial rewards for companies could hit them in the pocket. Only about half of the 3 million households who struggle to afford their water bills will receive financial assistance under these plans, so more companies should use their own profits to boost this support and not rely on the goodwill of other customers to fund these schemes.”
Anne Dacey, Environment Agency deputy director for Water: “Water companies are custodians of the environment. We expect them to deliver on the promised £4.6bn investment to protect and enhance rivers and beaches, as well as redouble their efforts to reduce pollution, protect more properties from sewer flooding and increase resilience to drought.
“Whilst we are pleased with this ambition, and the plans do broadly include our recommendations for environmental improvements, we will review the finer detail before challenging the companies on any further changes needed.”
A Defra spokesperson: “Government and regulators expect water companies to deliver the best outcomes for customers and the environment at the best value price.
“Ofwat’s publication of draft determinations indicate some water companies will implement welcome bill reductions for customers and increased investment to address supply interruptions and environmental enhancement, but there is clearly more to do.
“We support Ofwat’s approach, and water companies’ now need to step up and deliver these plans.”
Stuart Fegan, GMB National Officer: “The speech given by the Environment Secretary Michael Gove yesterday and the announcement by Ofwat today regarding the recent performance of Water Companies in England is simply just rearranging the deck-chairs on the Titanic
“What water customers really want to know is how will water companies improve their awful performance – particularly around pollution incidents and leakage.
“Many companies, including Southern Water, are making vital staff redundant in order to maintain dividends to shareholders and the meet the requirements placed on them by the Ofwat.
“Water is a precious resource. If the UK is going to meet Climate Change commitments and make sure water is affordable, we must scrap the privatised ‘water racket’ which has been in place for the last 30 years and take it back water into public hands.”