Utility Week

8 | 29TH MARCH - 4TH APRIL 2019 | UTILITY WEEK Interview ing on water efficiency from government is the most I have seen in all my years in the sector." Russell is also pleased with Ofwat's ambitions for the sector concerning water efficiency. "And it is very ambitious on envi- ronmental issues," she adds. "[Ofwat chief executive] Rachel Fletcher has been fantastic for water efficiency because she is really pas- sionate about it." Conversations about the regulator turn to PR19 and the draƒ business plans companies have submitted for the period 2020/25. Most water companies will be resubmitting their proposals to the regulator this week (1 April) because only three received fast-track status when Ofwat published its initial assessment of the documents. Waterwise looked "with interest" at Ofwat's initial findings of the plans. "There is such a mixed bag on water efficiency," Russell muses. "Even when there is top-level ambition, the water companies were set up in different ways to deliver different things. They weren't set up to deliver large-scale engagement programmes with customers – they were set up to deliver big assets and look aƒer them. "One of our big jobs is supporting and challenging the sector to make sure their decision-making processes and company cultures are fit for purpose to deliver that top-level ambition that we are seeing." But she is keen to point out that water efficiency is being demonstrated throughout England and Wales and is "no longer" a focus only for those water companies operating in water-stressed regions. "United Utilities are doing it for affordability, South West Water are doing it because they know that in years to come they will have a gap and they have no space to build supply sources – and Southern Water and Thames Water are doing it because they have a big challenge now." Russell wants to see a more joined-up approach to water efficiency, from policies to public educational messages. "We should not be building homes that are wasting water. We know what the situation is going to be like within our lifetimes and already we are starting to see the pinch in terms of extreme weather events and population growth and the kind of challenges that throws up for resilience. "We shouldn't be building homes that waste water, we shouldn't be building homes that waste energy – it's a no-brainer to put those things together." Other suggestions she puts forward are water neutrality for new developments – no overall increase in demand when homes are built – building regulations, product standards and a mandatory water efficiency label. "A mandatory water efficiency label is something that those of us in the water efficiency community have been banging on about for years and years and government is finally interested in it." However, Russell stresses that Waterwise is not the "water police" for consumers or companies. "For us it's about not wasting water – drink the water you need, use the water you need, enjoy the water – it's just about cutting down on waste." She explains the government will have a consultation on four areas connected with water efficiency: a national target for England per-capita consumption; a water effi- ciency label; the future role of metering; and building standards. "It's effectively a call for evidence. The door is open." She adds: "I know from all the govern- ments I have worked with – when I was first at Waterwise, when I was at Ofwat and when I was in government – Number 10 and the Treasury get nervous about more regu- lation and more metering, so there would need to be a concerted effort from those of us that think these kinds of things are the right things to do, to produce the evidence that Defra needs to go into those conversations armed with the ammunition." In terms of PCC, Russell wants to see more from the sector. "The problem is that across the sector the percentage reduction during the price review period is only something like 5.75 per cent and it was 5 per cent over the current period. "At Waterwise we would say that's not enough across the sector. But we would offset that by saying there is some really good ambition over the longer term." While she welcomes the focus on reducing leakage, she suggests it can also be a "barrier" to encouraging customers to become more water efficient. "The 15 per cent reduction target that Ofwat set is really interesting. I was at a conference when Trevor Bishop [former director of strategy and planning] was still at Ofwat and he spoke about it. He said, 'How astonishing that we said 15 per cent and all the companies decided they could meet it.' "So, if you put a figure out there, they will gravitate towards it." Russell would have loved to see Ofwat set a percentage challenge for a reduction in PCC. "They could have set, for example, 10 per cent in draƒ determinations or earlier than that in the methodology, because in some companies we did find that that 15 per cent on leakage concentrated minds and budgets away from water efficiency, which was unhelpful. Not across the board, but we'd really like to see equal treatment for water efficiency with leakage reduction." She has been involved in the sector "long enough" to recognise that it faces other challenges, such as the call from Labour to renationalise the water industry. Did this come as a surprise to Russell? "When I was a special adviser we weren't talking about it – we weren't talking about renationalising and it was seen as something a bit like the water grid – no one would ever mention it in a stakeholder meeting. But when I was at Ofwat and we were talking to MPs and members of the House of Lords about the competition in the Water Act, the questions I found hardest to answer were the ones about profits and dividends. "Just from having had those conversations it felt that something was changing. What we want to see is more water efficiency under whatever structure – there are opportunities in the current framework and under Labour's framework. It certainly got the companies thinking." Russell still has much she wants to achieve. Her first aim is to support the ambition that is there already by helping companies with internal culture change. The second is continuing to drive and support ambition on the government and regulatory agenda, and the third is to work more closely with retailers and wholesalers to drive water efficiency in the retail market. Water efficiency has come a long way, but as Russell concludes, there is still a long way to go for the benefit of "society, economy and the environment". "We shouldn't be building homes that waste water, we shouldn't be building homes that waste energy – it's a no-brainer to put those things together"

• Cover