Last week I was down in London, in a committee room of the House of Commons, on the panel for an All Party Parliamentary Water Group meeting. The agenda was to discuss the second half of the new Water White Paper.
My fellow panel speakers were Tony Smith, Chief Executive of CC Water, Andy Pymer, Head of Policy and Regulation at Wessex Water and Andrew Beaver, Director of Strategy at Ofwat. The meeting was chaired by Anne McIntosh MP:
The theme was a ‘customer focused industry’, covering regulatory reform, competition, metering and affordability – including the £50 subsidy for each household in the South West of England as set out in the White Paper.
Tony Smith suggested there was much to like for both domestic and business customers in the White Paper. He said research with water customers had shown a one-size-fits-all approach to metering wasn’t the best way forward, echoing the White Paper’s non-compulsory stance on metering. He then highlighted that customer satisfaction and perceived value for money are still not key performance indicators for the water industry.
Andy Pymer’s stance was that the Government should do more on metering to save water in the face of drought, such as making metering something you would opt-out of, rather than opt-in. He said Wessex Water’s recent water metering trials had resulted in 15 percent water use reductions and that it was important to target meter installation around key life stages, like when people move house. (Andy’s comments were put out in a Utility Week story shortly after the meeting; he’s also kindly just sent some background materials too.)
Andrew Beaver was happy the new White Paper coincided with Ofwat’s extensive Future Price Limits consultation, now just closed. Some key messages are reinforced by this overlap, such as a welcome focus on the customer. (There’s an awful lot in Ofwat’s consultation material and how it links to the White Paper. I’m going to save that for a future post!)
Alan Sutherland, Chief Exec of the Water Industry Commission for Scotland was in the audience. Alan explained how large water use customers in Scotland wanted more attentive service, and that they made this possible by allowing a wider, competitive range of service providers to come in to address customer preferences for better prices, being greener and so forth. The White Paper suggests learning from this Scottish example to increase water competition in England and Wales. (There was also some general discussion about having a ‘national grid’ for water, given the announcement the day before the meeting that the South East of England is now officially in a state of drought. I felt the pros and cons – and it’s mainly cons from my point of view – of a ‘grid’ sadly weren’t given a proper airing at this meeting though…)
For my part, I spoke about how innovation was going to be needed across the board to tackle the regulatory reform, competition, metering and affordability aspects of the new White Paper – as well as other long-standing, known challenges like rising energy use and carbon footprint, rising water bills and rising customer and industry debt levels. I noted that, whilst the White Paper gives quite a high profile to ‘innovation’, it probably underestimates how difficult and long-term it can be in the water sector. (Things may be getting worse now too, as many ‘innovation champions’ that have been around since before privatisation have retired from the water companies.)
I mentioned there were some good ‘hooks’ in the White Paper that inventive suppliers might use as a rallying call for change. I also suggested the sector still doesn’t seem to know what it wants to be. It just goes on spending vast amounts of money across a rather ill-defined – and unforeseen at privatisation – mix of major environmental enhancements of national significance, daily utility services, and maintenance of antiquated assets (distinctions first drawn by Dieter Helm some years ago; Ofwat’s recent deliberative research also has more about how the purpose and value of the water sector are currently understood by customers… I plan to follow up on it).
Overall, it was an interesting meeting. And yet it did feel like deja vu. I was last in front of the APPWG in 2008. It’s good to see that since then some of our UKWIR barriers to innovation recommendations are starting to be acted upon. There is now a multi-stakeholder platform to develop a shared vision for innovation. There is an innovation platform for water – on ‘water security’, details of which have finally been published by the Technology Strategy Board.
Nevertheless I felt I was making many of the same points over again – albeit to (some) new faces. I guess we have moved on from having discussion groups on reform, to making actual plans for reform. And these are plans that should soon become binding legislation. I just hope that when they finally do they will make a difference.