Ofwat to add customer condition to licences

Ofwat is looking to add a customer-focused condition to water companies’ licences to incentivise good customer service.

Speaking at the Utility Week Customer Summit, Ofwat senior director Claire Forbes said the regulator is keen to co-create the licence condition with companies, consumer groups and other stakeholders before consulting on it towards the end of this year.

“We’re starting to talk this year about a customer-focused licence condition to go into company licences as another tool in our toolkit to help increase the customer focus and incentivise companies to do that,” Forbes explained.

The proposal was welcomed by Warren Buckley, retail director at Thames Water who said he was “all for it” if it helped consumers.

“At its core, my job is to improve what we do for customers so I will be really interested to see what it includes for customers,” Buckley said.

He said he would welcome any change that could facilitate discussions and support among executive teams to reflect Ofwat’s focus on customers via a licence condition: “I will use it in any way I can if it helps me achieve my goals. The reason I do my job is because I’m passionate about customers, so I’m all for it.”

This was echoed by South East Water’s chief executive David Hinton who said promoting the “right behaviours” within companies is essential, but stressed that any such addition should not constrain innovation within companies.

The initiative was a recommendation made by CCW in its affordability review. The water watchdog’s Rob Light told Utility Week that Ofwat developing this idea shows that “the regulator was listening to CCW more than it ever has before”.