Utility Week

UTILITY WEEK | 8TH - 14TH DECEMBER 2017 | 21 Operations & Assets Liz Barber, group director of finance, regulation and market, Yorkshire Water "The bar for legitimacy in the water sector is probably higher than anywhere else, but it would appear in a changing world, the sector is not meeting that bar or keeping up. Fundamentally, if you stand back and look at what's happening you have private franchises providing two essential services, which the public has no choice about. "It's a complex mix of voluntary public and private sector and the water industry needs to be good and seen to be good at all of them for legitimacy. There is a public sector feel with some aspects of the sector, especially around big topics such as vulner- able customers and social cohesion. "Then the private sector element should be known as truly customer centric. But the rhetoric around offshore finances oen means the industry is not being celebrated for it. Ofwat's push around customers and service is absolutely the right thing to do. At Yorkshire Water, we have been doing an enormous amount of work to be mindful of how water impacts customers' lives. "Many customers have an aspect of vulnerability and we want to make sure we provide a more thoughtful service for all our customers. To do this, we need to be acces- sible as a company. "Some of the arguments in the debate about nationalisation may be hard to hear but it's important the sector does hear them. The industry needs to be fair and trans- parent with how we report performance, but it doesn't just mean financial performance. We also need to focus on customers, supply interruptions and other measures to make sure it is a meaningful and comparable performance. We should emulate a competitive market. "We need to do some soul searching as an industry and ask ourselves if we are being really transparent. I think the legiti- macy challenge has come at the right time for the sector because we're currently not doing a good enough job of explaining what we do. The whole sector needs to rise to the challenge." Steve Mogford, chief executive, United Utilities "It won't surprise anyone that we do not think Labour's renationalisation plans for the water sector would ben- efit customers or deliver them better value, quality or service. "Interestingly, since the calls for nationalisation, there has been little criticism in terms of water quality, customer service, environmental improvements or value for money. In these areas there have been vast improvements since privatisation. No longer are we described as the "Dirty Man of Europe". Drinking water qual- ity is now at 99.96 per cent, the condi- tion of rivers and bathing waters has improved dramatically and customer satisfaction with water and sewerage services is over 90 per cent. This has only been made possible by the huge invest- ment in infrastructure across the sector: some £130 billion since privatisation and none of it paid for from the pub- lic purse. In real terms, bills are similar to where they were 20 years ago and are falling. "Where there has been criticism, it relates to certain behaviours, governance and transparency. Where companies are falling short in these areas they must step up their efforts of their own accord or otherwise expect to receive regulatory sanctions. Some companies are already recognis- ing this, and that is a positive move for the perception of our industry. Regulation is evolving and must ensure water companies are even more incentivised to deliver continuing improvements and value for customers while at the same time penalising those that fail in this regard. "Nationalisation is not the answer and would come at a huge cost to the taxpayer when there are so many other pressing calls for invest- ment." Liv Garfield, chief executive, Severn Trent "Since privatisation, we've seen £150 billion invested by the industry to produce a 70 per cent improvement in bathing water complying with standards, serious pollution incidents have fallen by 86 per cent, leakage has reduced by 35 per cent and water quality meets rigorous standards 99.96 per cent of the time. "Yes, this has come at a cost, and the average bill has risen by 40 per cent since 1989, but most of that came before 1995 with a rise of only 9 per cent in real terms since 1995, equating to around £30 on an annual bill. "However, since assertive action by Ofwat, between 2009/10 and 2014/15, the price of the aver- age household bill in England and Wales fell by 2.6 per cent and Ofwat also determined that average bills should fall by 5 per cent in real terms between 2014/15 and 2019/20. "That means that, today, the cost of water and sewerage for an average household is just £1.08 a day. By com- parison an average household spends £3 a day on gas and electricity. "Yes, this industry has faults and we need to work with government, Ofwat and the Environment Agency to address them, but we also need to ask if this industry is delivering good standards for consumers at an affordable price? And, in the main, yes, we are. "I'd just ask everyone to consider whether the costly nationalisation of an industry that has delivered improvements and is reducing costs to consumers is the right thing to do right now."

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