Cathryn Ross: Water sector needs a sense of urgency

Thames Water’s director of strategy and external affairs has called for a sense of urgency on implementing changes in the water sector, with the aim of feeling their benefits sooner, rather than after the next price control.

The former chief executive of Ofwat said her time working in and around regulation and government showed “there are always reasons to delay” implementing something new, but stressed that delays incur a cost.

Speaking at the Institute of Economic Affairs’ Beesley Lecture series, she urged government to make its strategic policy statement as clear as possible and to remove barriers to progress.

“Government needs to set out a strategic vision for the sector and put its weight and muscle behind the key things that need to be delivered to achieve it.”

This, Ross said, includes agreeing major infrastructure delivery programmes needed for the next century, not just the next five years, and to mobilise cross-party support for such schemes to enable legislation, remove planning constraints and other blockers.

“Crucially, recognising the profusion of regulatory bodies whose statutory duties and remits might not otherwise dispose them to enabling these programmes, government needs to take on the role of Chief Knocker-Together-of-Heads,” she said.

For Ofwat, Ross said there needs to be a willingness to retain what works about the current regime and complement that with a framework to allow strategic enhancement programmes that bring a much-needed step change in resilience.

“Maybe we should be thinking less about all of this as interesting ideas that we can consider, and consult on, and introduce comfortably when we all get to the other side of PR24, but instead we should be pulling all the levers we can now, to get as much of it in place as we can today?”

Ross said the sector knows what it needs to do differently to boost resilience to climate change and has begun this mission towards catchment and nature-based solutions, but needs to push these “marginal projects” into the mainstream.

She insisted “financing is not the issue”, adding that as long as sustainable returns can be earned and there is clarity about risk allocation, then “the investors will come”

“We have a pretty good idea of the type of investment that we will need to improve climate change and population growth resilience. More water storage, more water transfers, more water re-use. Separation of storm water and sewerage, and ‘spongeification’ on a grand scale,” Ross suggested, going on to add smart metering to the list.

Spongeification, the need to transform non-permeable surfaces in urban areas to a sustainable drainage system, is needed in the capital at huge scale. Thames Water suggests an area the size of roughly 50 Hyde Parks needs to be turned in “a massive sponge” to prevent London being flooded during heavy rainfall as was seen in 2021.

Ross said the Thames Tideway Tunnel, which will be operational from 2025, would have been completely overwhelmed by the rainfall that flooded parts of the capital last summer so sustainable urban drainage systems are also required.

The former Ofwat leader joined Thames in June 2021 as part of the company’s overhaul. Prior to Thames, Ross spent three years as BT’s group director of regulation after stepping down from Ofwat in 2018 having overseen PR14.