Newly appointed Ofwat chair Ian Coucher has said he wants to see greater regulatory powers to debar directors of “egregious” water companies.
In one of his first public appearances, during a House of Lords committee hearing, Coucher said he supported the Environment Agency’s recent call for prison sentences for those responsible for causing environmental harm. He added: “We would like to see greater powers to debar directors of companies that are egregious or continuously poorly performing, we should not allow them to be company directors anymore.”
Answering questions from the Industry and Regulation committee’s inquiry into the work of Ofwat, Coucher, who was appointed in July, also expressed concern about how well companies really understand their asset bases and systems.
He pointed to the example of combined sewer overflows (CSO), expressing amazement that it was only the advent of monitoring in 2013 that highlighted longstanding problems.
Coucher said it raised two questions for him: “Did they really not understand their assets, and if they didn’t know about this what else don’t they know about?”
Ofwat chief executive David Black, also appearing before the committee, expressed support for former environment secretary Ranil Jayawardena’s proposed £250 million civil penalties, which he said could address the “considerable frustration” over fines being insufficient to deter bad practices.
“If I was to make a criticism of earlier regulatory periods, there was just not enough money at stake for delivering good environmental performance and customer service,” Black said.
He added there was “much more risk” for organisations now that the level of penalties was substantial.
The chair and chief executive both spoke of the collaborative relationships between regulators and how closely Ofwat works with the EA to share data and information in a way that “wasn’t so much in place 10 years ago,” according to Coucher.
To improve the water quality of rivers in England and Wales, Black and Coucher supported the government’s CSO discharge reduction plan but the chair cautioned against kneejerk spending.
“There’s a limit to what can be done too quickly,” he said and warned that he feared moving too quickly would lead to inefficient spending.
He said it would be far better in the longer term for excess water and surface runoff to be slowed within a catchment than funnelled to a treatment works. Both he and Black advocated for nature-based solutions and an avoidance where possible of spending on “big concrete tanks”.
“We’ve looked hard at what the scope can be,” Coucher said. “We want companies to do the right things rather than spend billpayers money to act quickly but inefficiently.”
Black and Coucher appeared as part of the inquiry that last week saw chief executives of Southern, Thames and Welsh Water raise concerns that asset health and management was a pressing issue for water infrastructure.