‘Don’t give water firms a free pass for failure’

CCW’s chief executive Tony Smith has challenged the water regulator to make sure coronavirus does not become a “free pass for failure” or “an easier regulatory ride at the expense of customers”.

As part of Utility Week’s #AskUsAnything webinar, Smith advocated a pragmatic approach to regulation, which reflected Ofwat chief executive Rachel Fletcher’s sentiment that companies must shoulder the responsibility of their own decisions.

“As a regulator we remain ready – and have shown ourselves willing – to step in and provide guidance and support where it’s needed,” Fletcher said, but emphasised that responsibility should be “on the shoulders” of companies.

“I’m strongly of the view that water companies are best placed to know what their customers want and how to look after both customers and staff”.

Having previously been accused of not providing enough clarity on Ofwat’s position, she reiterated the stance that nothing the regulator did should take away from the importance of letting companies make these decisions or their commitments to looking after customers and staff.

Recognising there will be a need for amendments to incentive targets and penalties, Fletcher said this would not be looked at during the crisis. “We think this is better done in the rear-view mirror than through crystal ball gazing.”

Smith added that while the industry had made “a really good start” at demonstrating resilience, he warned the real test would come if the situation carried on for a long time and the sector had to deal with a major incident on top of coronavirus.

He noted that complaints to CCW over the past month were down to previous years and praised the willingness of companies to help customers with payment breaks and suspending enforcement action as well as extending support to vulnerable people – especially those who would not have previously been considered in that category.

On the vulnerable, Fletcher said all regulated sectors – including the regulators themselves – are not doing enough to “put our arms around” vulnerable customers because assistance was often not easy enough to obtain.

“The data is really sobering, and I hope this crisis focuses our minds to give vulnerable customers the support they need and give these customers the support they need.”

Both the regulator and the watchdog praised the efforts of companies to maintain critical services during these extraordinary times – including connecting supplies for emergency hospitals.

Fletcher said: “Everyone in the industry deserves a big round of applause, especially as this comes after a period of challenge from months of storms.”

You can listen to the full webcast with Rachel Fletcher and Tony Smith as well as Ofgem’s Jonathan Brearley and Citizen’s Advice’s Gillian Cooper here.