Utility Week

UTILITY WEEK | 26TH OCTOBER - 1ST NOVEMBER 2018 | 7 Interview T ony Smith has always chosen roles that have two things in common: change and customers. It's fit- ting, then, that he has ended up as chief executive of the Consumer Council for Water (CCWater), a con- sumer group overseeing a sector going through a period of immense transformation. Smith has worked in all manner of industries. His early career was in strategy and marketing, implement- ing business turnarounds in oil, aerospace, automotive and fast-moving consumer goods businesses. Later, he joined the energy sector where he worked at senior level in electricity distribution. He has been at the helm of CCWater since its creation in 2005. When we meet earlier this month at Utility Week Con- gress 2018 in Birmingham, Smith is about to rush off to take part in a panel debate about going "beyond utility and price control boundaries". He believes regulation oen gets in the way of true customer focus, and that water companies need to act more as though they are in a competitive market. "The good news is the industry is a lot more focused on customers now than it was when I first got involved in regulation in 2004," he says, in between mouthfuls of a buffet lunch, snatched before our interview began. "I'd characterise the customers' involvement in the 2004 price review as essentially just asking the question: 'How satisfied are you with the service?' The customers would come back and say: 'We are pretty satisfied with the ser- vice', and then the real business began." Smith was Ofwat director of competition and con- sumer affairs at the time the 2004 price review was being conducted. The sector is now in the throes of PR19 and Smith is encouraged by the fact that customers have started making an impression on the price-setting process. "All the companies major on how much work they've done with customers. You're seeing quite a lot of evidence for customer priorities being addressed to some extent. "Also, the price picture is more attractive than it has been in the past, although everybody in the water sector, including the regulator, still always talks in 'real terms'. You've got to add inflation into that – customers are only worried about the bill they pay. Inflation quickly wipes out the small price reductions that may occur before it is added in. That's an issue." Water companies, he argues, are still not dealing with customers as they would in a competitive market. That goes, too, for the way they innovate. "Water companies are trying things, but it's not to the same speed or level of urgency as in other sectors, which are absolutely dependent on satisfying customers. They try things very quickly and if it doesn't work, you stop doing it and try something else. You don't see that speed of piloting things in the water sector yet." So how do you get water companies to act more like they might in a competitive market? Rewards and penal- ties. "What we've argued with Ofwat is that one of the ways to try and increase the level of urgency of water

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