Business engagement will drive economy, says Ofwat

Kicking off the Institute of Water annual conference and exhibition in London today (May 17), Thames Water chief executive Martin Baggs said that water companies are facing an increasing set of demands, including; political, economic, social, technological, legal and environmental.

Despite eliciting a roar of laughter when commenting on the south east’s current drought status during the recent springtime deluge, Mr Baggs said the situation is “very serious”. He warned that the UK’s drought is not over – even though in April 262% of the long-term average rainfall was recorded.

However, on a more positive note he said that the drought has helped provide “greater visibility” of other resources by drawing out new sources of water and greater collaboration between water companies.

He believes water suppliers will have to look towards further consolidation in the future and said that while innovation will play a major role it is not just about technology as smarter more flexible regulation is also needed.

Meanwhile, he said managing customer expectations – in particular business customers – must factor into companies strategies. This is in line with last year’s Water White Paper (WWP) and upcoming Water Reform which calls for increased choice for business customers and public sector bodies.

He concluded by saying what he felt is needed is “clarity and a joined up approach”, but added that Government and regulators will need to work together as it is a complex situation that won’t be resolved overnight.

In addition, he said that while market reforms are needed that “it’s about striking the right balance”.

Providing a regulator view was Ofwat’s director of policy and communication Marian Spain, who discussed the development of water strategy regulation and price settings for sustainable outcomes.

Commenting on the challenges facing the water industry today she said that a “joined-up” narrative was needed as many of the obstacles facing industry are unpredictable and will require “smarter innovation” to overcome them.

In addition, she said that outcomes from the WWP will see a “real shift in public policy, legislation and environment policy” and added that the case for water reform is “no longer theoretical, but real”.

She concluded by saying that tailored regulation is needed, as well as increased choice for business customers, warning suppliers “shouldn’t underestimate how important that is”.

This shift of focus from domestic customers to business is necessary, she said, because “businesses play a significant part of the economy”, and added that “if water companies can help businesses better if will help all of us”.

Carys Matthews