Utility Week Industry Champion 2022: Jonson Cox

Former Ofwat chairman Jonson Cox writes for Utility Week on the back of being named Industry Champion at this year’s awards. He discusses his role as ‘poacher turned gamekeeper’ and his concern that regulators are under recognized and lowly rewarded for what they do.

I am honoured to receive UW’s Industry Champion award for 26 years’ service in water and utilities.

I have overheard veterans grumbling about the ‘poacher turned gamekeeper’ move, an unplanned development of chairing Ofwat, after leading two water companies through major recoveries.

Two themes have guided all these roles: legitimacy and operating performance for customers. Britain has been almost unique in entrusting the transfer, in perpetuity, of the public service of water to the private sector. Parliament can and will eventually change that if they don’t believe it works in delivering for the public good.

I joined Yorkshire Water to lead a complete turnaround after it well and truly squandered public confidence over inept management of the 1995-6 drought. I was so proud when by 2000, we got back to the jointly ranked top operating position with Wessex1. At Anglian, a disastrous strategy before I joined in 2004 started the trend of ‘financialisaton’ of the water sector. AWG had taken most of its equity out, geared to 84% debt and committed to outsourcing all but 200 jobs. I was delighted we restored Anglian’s track record of operating performance which has continued in the twelve years since I left.

Those experiences were inspiration when, unexpectedly, I was asked to chair Ofwat. My mantra was to bring the sector back to a focus on running the business. It led to Operating Delivery Incentives, Performance Commitments and significant equity returns for frontier performance. The theme of legitimacy is what guided our initiatives on board leadership, governance, and resilient capital structures.

For all I am proud of huge improvements over my periods in charge, the sobering state of rivers and this week’s news of companies penalised for poor performance shows no-one can rest on their laurels. One company penalised for service today is called out for a 13% dividend yield on equity – how does that behaviour maintain legitimacy?

Most of all I thank the teams and people with whom I worked: ‘the class of 97’ and later years in Yorkshire, the teams who helped dig AWG out of the mire, and most of all, colleagues at Ofwat. Regulators are under recognised, lowly rewarded for what they do. But they deliver transformational changes across their sector for the public good. And when they take the brave step of putting their head above the parapet, there is material risk of incoming fire. Society needs them to be brave, and recognised.