Consumers, wider reforms & ownership
Empowering consumers
We want to return trust to the sector, ensure consumers are protected and provide confidence in the delivery of water company investments. We recommend:
- Strengthening the consumer voice through a consumer champion ombudsman with the legal power to resolve disputes, bringing water into line with other sectors.
- Improving monitoring and regulatory oversight of delivery, including by ending Operator Self-Monitoring (OSM) and replacing it with a more robust system that includes third-party verification.
- Reforming water charges to make them fairer through mandatory smart metering and new tariffs that replace standing charges with an innovative alternative linked to the volume and timing of household water consumption, promoting more sustainable usage while protecting households with legitimate requirements for high water use.
Wider reforms
Effective management of the water system involves different stakeholders; many of whom currently take no responsibility for the harm they cause. Failure to control pollution at source means the remediation costs are chiefly borne by water billpayers. Likewise, the failure to manage run-off increases pressure on wastewater infrastructure. Pressures on water supplies from population growth and climate change are exacerbated by inadequate water efficiency standards for new housing developments. To ensure all sectors contribute their fair share toward sustainable water management, we recommend:
- The UK and Welsh governments introduce a control at source principle for harmful substances – including a ban on the manufacture and sale of non-essential uses of PFAS, and of mercury in dental amalgam – and an extended producer responsibility scheme to pay for advanced ‘fourth-stage’ sewage treatment to match European treatment standards.
- Defra should immediately begin work on a National Rainwater Management Strategy to inform its approach to catchment management in urban areas.
- The UK government should implement changes to the planning system and building regulations in England to unlock economic growth by speeding up construction of major infrastructure and improve water efficiency, creating headroom for new commercial development such as AI data centres.
Ownership models
As an industry body, our experience is that there are some differences produced by different ownership models (for example on public perception of trust, readiness of access to debt markets, or the ‘push’ on management teams by equity owners). However, these differences are (i) typically small in comparison to other issues raised in this submission, and; (ii) act in different directions such that each model has various advantages and disadvantages. Our experience is that performance ultimately rests on a clear direction set by government; good quality regulation; and access to sources of investment (which some countries have told us they find harder under a publicly-owned model). These three factors are among the most significant influences on outcomes.
The reality is that every water utility in Europe faces similar challenges, regardless of ownership, from climate change, aging assets, higher environmental and drinking water targets, changing public expectations, new technology, emerging pollutants and shifts in the way businesses use water.
While there are no clear benefits to changing the ownership models of either Wales or England, there are obvious costs. Those costs and disbenefits are even more serious when investment is increasing sharply (and over £12 billion of new equity is required). We are therefore strongly of the view that focussing on ownership models is to miss the point of what really makes a difference for customers, society and the environment; we are opposed to this changing.
