Ofwat signals ‘culture change’ in first public business plan

In its first publically available business plan Ofwat has outlined a focus on building industry trust as part of a sector-wide ‘culture change’.

Ofwat said on Wednesday that it is the first time that its annual five-year business plan has been made publically available, in order to foster a closer working relationship with the industry in building sector confidence.

“The sector needs to change culture and innovate to succeed. And Ofwat needs to do the same,” said Ofwat’s senior director of operations Bev Messinger.

The business plan for 2015-16 to 2019-20 comes just two weeks after Ofwat laid out its proposed 2020 plan for the water sector which aims at encouraging companies to find ways of delivering “more for less” and to use “scarce resources more smartly”.

The shift from a prescriptive regulatory approach to one which uses industry collaboration to drive a customer-centric model is part of a wider evolution in Ofwat’s approach put forward at the beginning of the year.

Ofwat said its new business plan for the rest of the decade aims to drive forward further transformation in how it regulates the sector by using a broader range of tools, its principles of economic regulation and new ways of operating and delivering its work.

Ofwat plans to achieve this by focusing on five key priorities; including implementing the Water Act reforms ahead of the PR19 price review, monitoring the sector’s overall performance and ensuring that it has the skills, experience and culture to support its strategy.

But the regulator has also included a fresh focus on trust, saying it will prioritise the need to maintain customer and investor confidence in the sector as it undergoes a process of radical change.

To achieve this, Ofwat chief executive Cathryn Ross says the regulator and the sector need to work together.

“We have an ambitious work programme to inform, support and challenge the water sector to maintain customer and wider society’s trust and confidence in vital public water and wastewater services. But we can’t deliver trust in water alone,” she said.

“That’s why we are publishing our plans. Not only does it provide greater transparency to our stakeholders, but also highlight areas where we could work in partnership together,” Ross added.

Writing for Utility Week on 7 August Ross said the industry still faces “some big challenges ahead”.

The 2020 plan aims to meet these challenges in collaboration with the industry, she added.

“We don’t have a monopoly on good ideas. So we want to get your views on whether we are tackling the right questions and the best way forward,” Ross said.