Interview: Alan Lovell, chair, Consumer Council For Water

“I have a great personal interest in the sustainability and water efficiency agenda – very much from the consumer’s standpoint.”

Alan Lovell has big shoes to fill. His predecessor as chair of the Consumer Council for Water ­(CCWater) – Dame Yve Buckland – oversaw a huge transformation in the industry in terms of customer service and satisfaction over her ten-year reign. But despite only having been in the role for a couple of months, the new man is not daunted.

In fact, he has a quiet but steely determination to ensure the good work will continue, but also to make his own mark on the water watchdog. Not a revolution, more a gradual evolution of “tweaks”, as he puts it.

Lovell came to CCWater at the start of April with a background in the energy sector, having been the chief executive of renewables developers Infinis and Tamar, and is still a non-executive director of two clean energy businesses. Task number one will be learning about the industry, and getting to grips with the details of the last price review. But Lovell already has some ideas about his likely agenda. Ensuring the survival of CCWater is top of the list, plus extending its profile and reach. The perennial hot potato of a national social tariff has landed on his desk, as has market reform – Lovell outlines plans to step in if necessary to protect customers.

Then there is the issue of making sure the companies have “the consumer at heart” when the next price review rolls around, by changing the way the customer challenge groups (CCGs) are run.

A lot to take on, then, especially with the weight of expectation on him as he follows the highly regarded Buckland – but that is something Lovell has no worries about. “It is part and parcel of the job,” he says.

After playing the “new boy” card, he goes on to reveal a depth of knowledge about the UK water sector, and that Buckland “has been very helpful with some pointers on where I should focus, and that has been much appreciated”.

Lovell says his priorities for his first few months are to gain a greater understanding of the industry, the impact the price review has had on the water companies, and their ability to deliver on business plan promises made to customers. He is making it his mission to learn the names and faces in the industry, and what makes it tick – and also to assess the impact PR14 has had from the perspective of an outsider coming into the sector.

The CCGs are one area in which Lovell has ambitions. He is “determined” to ensure ­CCWater has a role in them, but wants to avoid taking on chairmanship. This, he says, will allow consumer voices to be heard and to feed directly into the PR19 business plans.

“The issue of CCGs is an area where it would be much better if there was a consistent regime. So one of the things we will certainly be looking to do is encourage Ofwat to promote a consistent format for the CCGs in which we will be delighted to play our part.”

Lovell understands that this will not be a straightforward process because the regulator “is understandably reluctant to mandate the companies how to do it”, but he is insistent a consistent set-up is needed.

Having the same set-up for the CCGs for each of the 18 water companies will, he says, ensure that across the UK, the voices of the water customers are heard fairly and equally as the next round of business plans are drawn up.

The other area in which Lovell wants more consistency is that of affordability, social tariffs and dealing with bad debt.

“We’re currently at a third tier of desirability,” he says, pointing out that while “it is a start” that most of the water companies have or are introducing social tariffs, the variability between them, where some customers may be eligible for support from their water supplier but not their sewerage company, or vice versa, remains a ­significant issue that needs to be addressed.

Lovell says he is pushing for a government-funded and centrally run social tariff scheme, where the £400 million CCWater estimates is required to deal with the affordability problem is provided from taxation, rather than paid for by customers via their bills.

“It’s a tough problem,” he adds, going on to say that under the current system only 10 per cent of the money needed is available because customers are not willing to pay more through their bills. He also concedes that “whether public funding will be made available under current constraints is somewhat dubious”.

Labour and the Liberal Democrats both set out plans in their general election manifestos to create some sort of national social tariff programme, but with a Conservative majority in Westminster, elected off the back of promises to cut taxes and to cut spending, the chance of a centrally funded and run scheme looks remote – at least for now. But it won’t stop Lovell making the case and ­pushing for it.

He is not daunted at the size of the task before him and Lovell remains keen to be the champion of fair consumer bills and good and improving customer service – something which has been at the heart of what ­CCWater has done since 2005. But he tells Utility Week that he wants the water watchdog to do more during PR19, something which he calls a “tiny change of direction”.

“I have a great personal interest in the sustainability and water efficiency agenda – very much from the consumer’s standpoint.

“I think it may be appropriate in PR19 to take a slightly longer-term view of the steps that the companies should be taking to improve efficiency and reduce leakage and generally be good environmental citizens,” he reveals.

“If we are taking a longer-term view of what is in the best interest of the consumers, then it is appropriate that water efficiency, sustainability and resilience play a slightly more significant role in our activities than it has to date.”

It is not only the efficiency and sustainability of water that Lovell wants to have a bigger role in the coming years. He also wants to make CCWater “higher profile” as he starts to reshape the watchdog.

With a glint in his eye, Lovell, who relishes a challenge, says: “There is a bit of a suggestion from stakeholders that we should become a bit more authoritative, to get out there and say more what is good for consumers, maybe a slightly higher profile.

“A slightly higher profile would be a good thing.”

But a more pressing matter for Lovell, who is making the most of the “relatively calm time after all the excitement of the price review”, is market reform and the opening of the non-domestic retail market.

He is still confident the market will open on time, but says he will be keeping a close eye on the process, which should result in non-household customers being able to change water supplier from April 2017. But his confidence is tempered by a begrudging willingness to step in, if he thinks doing so would save customers from the turmoil of an under-prepared market launch.

“One could envisage the circumstance in which we felt there was a potential disadvantage to customers and then we would seek to defer [market opening]. It would surprise me if it came to this but we may have to do that.”

He adds that Ofwat and Market Operator Services Limited (MOSL), which have recently taken on the responsibility for overseeing the market opening programme, still have time to resolve any issues that may arise.

This brings Lovell back to where his discussion with Utility Week began, being the new boy and replacing a giant figure within the industry. He acknowledges the good work done by Buckland, thanking her for leaving him to take over from a position of strength.

“It is fantastic to take over a good organisation where there certainly are no wholesale changes required – just the odd tweak here and there,” he says, referring to the changes he’s already outlined.

“It’s been a very, very successful organisation, which has just achieved a very successful price review for both customers and the industry.

“So 95 per cent of what I find, I like and will be content with.”

Any other plans for CCWater may be developed by the new chair after the completion of a whistle-stop three months during which he is meeting all the water companies. This is helping to fill any gaps in his knowledge, as well as increasing his understanding of the industry.

Ending the interview by taking a sip from his glass of tap water – what else? – he says: “I can’t say so far that I’ve seen or come across anything I wasn’t expecting.”

Smiling, he adds: “But I’m sure I will.”