Ofwat fighting ‘yesterday’s war’ on pollution

Ofwat is fighting “yesterday’s war” when dealing with environmental breaches because of the “retrospective” nature of the regime for policing such incidents, a former board member has said.

Giving evidence to the House of Lords Industry and Regulators Committee on Tuesday (5 June), Professor Catherine Waddams of the University of East Anglia (UEA) was grilled on whether the water regulator has “sufficient” powers to deal with pollution

She told the committee that the existing regime for dealing with water pollution seems to have “broken down” and there is “some evidence” that it is worthwhile for companies to risk fines, suggesting that these penalties are “are not harsh enough”.

Professor Waddams, a member of UEA’s Centre for Competition Policy (CCP) , said: “Companies are allowed to charge consumers on condition that they meet these quality levels. The problem if they don’t, we don’t find out immediately because it’s all retrospective. Fines may not be quite at the right level.

“The system seems to have not worked well in recent years because of this.”

The retrospective nature of the regulatory regime means that Ofwat is enforcing breaches, which have already happened and dealing with board members not even in place when the incidents occurred, she said: “The timing can be problematic in the sense you are fighting yesterday’s war rather than what needs to happen today.”

Waddams said she did not back stripping licenses from companies as a penalty for poor performance but instead favoured “much stronger sanctions” for board members to concentrate their minds.

She also backed nationwide co-ordination of any effort to introduce a social tariff for vulnerable customers because it is “part of a much bigger problem” that should be decided by politicians.

“For people who have difficulties with water bills, the issue is poverty not water poverty.  Leaving it to individual sector regulators to deal with an issues that are systematic is unlikely to end up with the best possible way of dealing with those issues.”

Waddams also said may be “a case” for improvements to the water network to be funded from taxation rather than bill payers because they are a “public good”.