Consumers could get new roles in effort to rebuild trust in water companies
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Consumers could be allowed to attend water company board meetings under new rules proposed by the regulator.
Companies may survey and research customers to understand their views, involve them in decision-making and seek feedback on consumers’ experience.
Under the suggested reforms by regulator Ofwat, customer voices could be heard by making changes to a company’s governing body, the board of directors.
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The obligation to hear billpayers’ views could be met by boards allocating time for consumer matters, arranging for consumer experts to attend, holding open board meetings for the public, or by having an independent director with a consumer focus.
Boards could also comply by arranging for independent consumer experts, such as the Consumer Council for Water (CCW), to regularly attend.
Topics that consumers will have to be consulted on include the cost of bills, performance of key water services, support when things go wrong – like water outages – and the company’s investment priorities.
When decisions likely to materially impact consumers are made, the water company needs to have clear processes to ensure consumers are involved, Ofwat said.
As well as including water users in decision-making, utilities will have to work to understand how decisions impact consumers so those views are taken into account in future decisions.
Seeking this feedback must involve engaging with the new consumer panels being developed by the CCW to hold companies to account, Ofwat’s rules outline.
Why’s this being done?
It’s all part of the government’s aim to rebuild trust in the water sector and to improve accountability, transparency and performance in water firms.
The public has been outraged by record sewage outflows and polluted waterways at a time when senior executives are receiving bonuses and bills are rising.
New powers were granted to regulator Ofwat to clean up the sector, and rules on pay and bonuses were developed and took effect in June.
They’ve already been used to claw back bonuses.
What next?
Stakeholders have until 1 October to respond to the consultation, with Ofwat intending the rules take effect on existing water utilities in April.
Consultations already took place to make the suggested rules with 11,000 responses received from businesses, groups and individuals.
Not all of the replies made their way into the rules. The idea of having MPs and local authorities involved in decision-making, received from “several respondents”, appears not to have been included.
It comes despite the recent announcement of Ofwat being scrapped, as part of a once-in-a-generation review of the sector.
It and the other regulators are to be replaced by one single body.
Ofwat said it was working until new arrangements were in place and continuing to implement rules on remuneration and governance.
How’s it been received?
Environmental charity River Action said to rebuild trust in the industry, the government “needs to go a lot further than tinkering around the edges”.
“We need a complete overhaul of how water companies are owned, financed and governed. That means ending privatisation and instead operating for public benefit,” chief executive James Wallace said.
Industry group Water UK said: “It is important customers are involved in water companies’ decision-making.
“We will continue to work with government on these proposed rules and other vital reforms to secure our water supplies, support economic growth and end sewage entering our rivers and seas.”
