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It’s not just the weather that’s been terrible this summer. For United Utilities, it’s been the holiday from hell, with the cryptosporidium bug set to infect the water company’s reputation for a long time to come.
The arguments about whether UU should have moved faster to deal with the pathogen will be played out for months – perhaps even before a Parliamentary inquiry. What’s certain is that the company faces a major financial hit as it compensates tens of thousands of angry customers, and an even higher reputational cost.
As cafe owners and hoteliers were paraded on national news programmes with their tales of losing thousands of pounds of income over the tourist high season, any chance of UU being the business retailer of choice when the market opens in 2017 were disappearing before its eyes.
The company has been tight-lipped about its plans for market opening, though given its activity in the Scottish market and in the establishment of MOSL, it presumably has ambitions. But any rival incumbent or new entrant looking for growth will surely scent blood in the North West.
Neither is it just United Utilities’ reputation that has suffered. The problem for the wider water sector is that it only features in the news when something goes wrong – when bills go up, or in the rare instance of a public health scare such as this. Ofwat’s laudable “trust and confidence” agenda took a step backwards this summer.
Trust and confidence is in short supply at Npower, too, where chief executive Paul Massara finally took the rap for the company’s ongoing customer service problems. A respected leader with bags of enthusiasm and some good ideas for the future of the industry, his big mistake came early in his tenure when he made a commitment on customer service he just couldn’t keep. When the customer service problems hit the bottom line in this summer’s results, his time was up. With Paul Coffey now in the driving seat, can we expect swingeing changes along the lines of British Gas/Eon, as Npower becomes the latest member of the big six to reinvent itself in the face of an uncertain future?
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