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Comment Chief executive's view Cathryn Ross, chief executive, Ofwat Listen to water customers Water companies have been privatised for nearly 25 years. Now is the time for them to start taking ownership of their relationships with customers. O ne of the best things about coming back into a sector is the opportunity it provides to be able to spot changes that have occurred. Arriving back at Ofwat as the new chief executive after just over two years at the Office of the Rail Regulator has given me just such a perspective. In recent weeks, I've been making the most of this opportunity by meeting stakeholders, including water company chief executives, through a series of round table events. One of the first things that has struck me about those encounters is how much things have changed and, most importantly, how much progress has been made. Two years ago, in similar conversations, I recall outlining how Ofwat was considering changing its regulatory approach. Responses were varied and uncertain. For some, the case for change was unconvincing. The water sector wasn't broken, the argument went, so why did it need to change? My response was the same then as it is now. Water companies have been privatised for nearly 25 years. Now is the time for them to start taking ownership of their relationships with customers. Our current Price Review sets out our expectations here. We have been clear that we expect boards to sign off their company's business plan. The days of water companies being given a tick-box set of requirements with the hope that the regulator would look after customers' requirements are gone and they will not be returning. Instead, Ofwat is pushing water companies to change the relationship they have with their customers. We want to see companies listen to their customers' priorities and respond, rather than draw up their plans and then seek to justify them to their customers. This week, we received companies' business plans for 2015-20. We will be testing and challenging them to ensure that the focus of the plan is not performing for the regulator, but responding to whatever customers have said is most important. Two years ago, some water firms needed convincing. Today, the dialogue is very different. What I've heard from my conversations 6 | 6th - 12th December 2013 | UTILITY WEEK so far is that a significant change in the rela- the political agenda, has intensified in recent tionship between water companies and their weeks and has extended to include housecustomers is emerging. Companies under- hold water bills. In this context, Ofwat's role stand what we're trying to do, recognise the as a strong and effective independent regulabenefits, and see how it makes sense that they tor for the sector is all the more important. own and focus on the customer relationship. Added to the mix is the Water Bill currently Someone said to me the other day: "It's going through Parliament, which will enable not as if water companies provide chocolate all businesses in England to switch their bars." This seeming truism highlights a funda- water and sewerage supplier. mental point about the water industry. Unlike This week, I gave evidence to two Parliasome consumer products, the services the mentary committees: the Water Bill Commitwater companies provide are truly tee and the Environmental Food essential. And most customers don't and Rural Affairs (Efra) Commithave a choice about where they buy tee. I was clear to both that we them. For Ofwat, this means that, welcome the Bill and the reforms in fulfilling our statutory duties, we that it will deliver. It has the potenneed to act in ways that are demontial to deliver real benefits for both strably in the interests of customers customers and the environment and, where appropriate, society more and to open up a new stream of broadly. It is important for our legitiinvestment for the sector. macy that – while keeping a steady With such a demanding hand on the tiller of a tried and tested "We will agenda ahead, Ofwat needs to be regulatory regime – we are listening at the very top of its game, using to public needs, wants and concerns. continue all the regulatory tools available I want to build on the recent suc- to push to protect customers and ensure cess Ofwat has had in listening to companies fair competition. I am working those concerns, protecting custom- to be more closely with our chair, Jonson ers and driving a changing relationCox, and senior team to plan how transparent we will deliver this. This year, ship between companies and their customers. Our current Price Review and open" new board members have been is just one example of this. But there appointed and we have started to are other areas where we have a role to play reinforce our senior leadership team. This in protecting customers and ensuring fair includes the recent appointment of three competition. We will continue to push com- new executives to enhance our capacity in panies to be more transparent and open casework and communications and to lead about their decision making. We want to see our corporate services. And, coming back to companies explaining to their customers Ofwat, I am pleased to see that our people why they make the decisions that they do. are still completely committed to what we do We also want to see customers getting a and are working hard to deliver. better deal, through faster resolution of their One of my priorities is to review our corcomplaints. I believe this can be achieved porate strategy to ensure that it is grounded through our work with the sector on creat- in what both customers and wider society ing an Alternative Dispute Resolution system want from the water sector. There will be and we're working with the Consumer Coun- more to say on this in the weeks ahead and I cil for Water, Water UK and water companies look forward to a wide range of new converto deliver this. sations as we engage others in our thinking. I've arrived back in the sector at a time Above all, we will continue to challenge ourwhen it is under intense political and media selves, as well as the industry, to ensure that scrutiny. The ongoing debate about energy customers are protected and that efficient pricing, which has long been near the top of companies can finance their functions.