Water regulator urges Michael Gove to hand them more powers to reform sector
2 min read
The UK’s water regulator has called on Michael Gove to hand them more powers in a bid to tackle companies who put “financial engineering” ahead of consumers.
Ofwat say licence conditions should be changed to reflect “what is expected of those privileged to run and own public service monopolies”.
They are calling for Government support and potentially new powers in order to make the reforms.
The letter from the regulator's chair Jonson Cox to Michael Gove comes after Ofwat said providers had “fallen well short” in planning for the cold snap last month that left some households without water.
Last month the Environment Secretary last month accused firms of “playing the system”, avoiding taxes and keeping charges higher than they need to be.
“We too consider that the corporate behaviour of some water companies has diminished trust in the delivery of this most vital service,” Mr Cox's letter reads.
“Some companies are seen as focused on financial engineering at the expense of public service…
“We want water companies — who benefit from captive customers and regulated returns - to put customers and their interests at the heart of what they do.
“We will be reforming companies' licences to reflect this aim so it is clear to all current and future owners and executives.
“While I hope we can promptly achieve these licence changes with company support, we may need your support, and potentially new powers, for this part of our plan.”
A spokeswoman for the Environment department said: “It is vital that concerns over poor corporate practice by the water companies are addressed.
“That is why the environment secretary asked Ofwat to investigate what action should be taken to ensure high standards and responsible behaviour.
“We are grateful for Ofwat’s report and will respond in due course.”
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