Ofwat wanted to be scrapped sooner by water companies

Water companies are encouraging the government to scrap Ofwat, the water regulator, sooner than planned.

Ofwat currently prevents water companies from increasing bills. It also has the power to fine companies if it decides they have breached their licence.

Ofwat replacement ‘Real accountability’

A recent government white paper proposed a new regulator with the power to act more quickly against companies that fail to comply with regulations. This includes the ability to impose financial penalties.

However, the 52-page white paper mentions fines only once and provides no specifics.

Additionally, Ofwat already has the power to fine companies up to 10% of their annual turnover for license breaches.

So whilst the white paper claimed to be about “real accountability”, it failed to provide any details.

As the Canary previously reported:

The document also fails to mention how the current privatised system is screwing over regular people. From massively increased bills to going weeks without water to not being able to swim at Britain’s beaches, it appears there is not a single part of Britain’s waterways that private firms have not fucked up.

And is there any real surprise that water companies want the current system, which may have its faults, but ultimately fines water companies and imposes bill caps, for one, with zero details ironed out?

It almost seems as if forcing a new system sooner than planned will allow water bosses to do whatever the fuck they want, at least for a while. That is, until the government can catch up.

Water UK, which represents the water companies, told the Financial Times that the government is moving too slowly to abolish a system that is “complex, too expensive and too slow.”

Water UK also called on ministers to set up the new regulator in ‘shadow’ mode. This would allow it to start making decisions. I bet holding those same water companies to account and fining them would be at the top of its agenda? I think not.

A shit ton of debt

There are 16 private water companies in the UK. Between them, they have £82.7bn of debt. At the same time, many of them are taking hundreds of millions in profits each year. In total, nine of them are being monitored by Ofwat.

Additionally, Ofwat recently stopped more than £4m of potential bonuses for water bosses under new rules on performance-related executive pay. This included Thames Water’s chief executive, Chris Weston, and Steve Buck, its chief financial officer.

Despite this, Chris Weston still received a base salary of £850,000 – which is absolutely disgusting given the state of the country’s waterways. Overall, without a bonus, his remuneration package was £1.035m. And let’s face it – a salary like that is hardly an incentive to make any significant changes.

So why would they not want Ofwat abolished?

Water companies know precisely what they are doing, and the government is complicit. As it stands, the system allows water companies to extort consumers while failing to provide decent service. All while making a shit load of cash every single year.

But nothing is going to change until the government takes water companies back into public ownership. Because as long as shareholders have more power than the average consumer and water companies are not held to account, the country will never have high-quality, clean water at a fair price.

Feature image via Imani/Unsplash