Utility Week

UTILITY Week 19th June USE

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UTILITY WEEK | 19TH - 25TH JUNE 2015 | 9 Interview Y ou might be surprised to hear the chief executive of Water UK saying that she'd be "distressed" if the organisation were thought of as "the voice" of the UK's water sector. Many might assume that the primary purpose of an industry trade association is to uphold the interests of its members in Westminster and to lobby government on issues that affect its operations or profitability. But Pamela Taylor, speaking to Utility Week before she steps down from her role at the end of this year, says a changing political and regulatory environment has ousted that traditional formula. Despite the hot London day outside Water UK's West- minster offices, Taylor is cool, crisp and "proud" as she explains the "really dramatic repositioning" Water UK has had to embrace in recent years. Taylor's vision for the future of the organisation is steeped in the experience she has built up since Water UK's inception and, with both a new chief executive and a new chair to recruit this year following the sud- den death of Water UK's first independent chairman, Sir David Rowlands, in 2014, there's clearly a heavy mantle of expectation to hand over to the fresh leadership duo. Casting her mind back to the birth of Water UK in 1998, Taylor sets a scene of chaotic dissent: "It was a hostile political environment; it was hostile in terms of stakeholders, public opinion, and so on. The companies looked very much out of touch with their customers and were squabbling publicly and undermining each other and briefing against each other publicly and privately." Coming into being late in the regulatory cycle and "too late to influence the 1999 price review", Water UK's most urgent challenge was to create a sense of unity and to support the sector through that "sausage machine" of financial scrutiny, which resulted in water company share prices taking "a hammering". In this unpleasant climate, Taylor led the drive for Water UK to "get its act together" and become a "well organised outfit", recognised by key players as a pioneer in stakeholder engagement. Emphasising just how hard it was to gain that posi- tion, Taylor recalls. "I remember when we set up Water UK, I put out a statement that day saying we wanted to work with our fiercest critics – and I named some of them. And do you know what? People got in touch to say, 'We dislike you much more than those people you've named!'" She chuckles ruefully. "It was utterly, utterly amazing." Aer about two years of "really hard gra", however, Water UK had made a name for itself with the sector, gov- ernment and key stakeholders for consumer issues and the environment. This positioned it well to take a more proactive role in shaping the next price review, standing shoulder to shoulder with industry to deliver consensus messages on set piece issues such as the cost of capital. Creating a team spirit for "fighting the price review" was appropriate then, says Taylor, but fast forward to the present, and the same dogmatism would swily result in Water UK being seen as standing in the way of progress – "the first step to becoming irrelevant". "What you now see – not just in England, but in Wales and Scotland too – is a new kind of price review. And you see the big change of the regulator's emphasis on individual companies, on their customer engagement and on transparency," says Taylor. Accordingly, Water UK has moved itself "consider- ably". It now aims to promote publicly the industry's contribution to society – something on which it has com- missioned a large piece of research – and to be an impar- tial hub for knowledge exchange and scenario mapping for the future. It aims to clarify the need for a flexible regulatory environment that understands that different water companies, run by different boards, will adopt dif- ferent strategies and different points of view. "It's for us to explain why that happens," says Taylor – although she clarifies that Water UK by no means sees it as within its remit to comment on the rights or wrongs of specific differences of opinion – such as those points of contention being battled out between Ofwat and Bris- tol Water in the current CMA hearing. In a world where regulators across the utilities sec- tor are proclaiming an age of principles-based regula- tion, Taylor says it is "obvious" and "essential" for Water UK to act as a facilitator of conversations and a source of knowledge about the industry, rather than a lobby group. However, she's also aware that it may be seen as a "brave" move. "It's easier to just say, 'What can we can all find in common?' So that we can stand shoulder to shoulder, maybe with our arms folded, and say 'No'. But you have to bear in mind that if you say, 'We are the voice of the industry', generally that means you shout and you don't listen."

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