Is there a single competent regulator?

So Ofwat have capitulated to the water companies again.

You just know they’ll be back at the end of this five year cycle with the same excuses and their begging bowl out.

Twunts the lot of them.

The claim of incompetence is based on the assumption that the regulator is there to protect consumer interests.

it’s absolutely ridiculous. Sod re-nationalising Royal Mail, the water companies should be re-nationalised as of yesterday!!

They’ve been paying shareholder dividends/massive chief exec salaries at the expense of repairs/infrastructure/investment etc for years. And the massive fines some had recently for being utterly shite? Literally just being passed onto the customer now in the form of hugely increased bills! What was even the point of the fines? Should’ve handed out prison sentences for corporate negligence instead!!

Given that the roundabout of top execs in regulators and respective industries only works on the assumption that nobody does any actual regulation beyond a shaped wrist. Can we really expect anything different?

Yup, can kicking. Nothing solved.

the water companies should be re-nationalised as of yesterday!!

End result should be nationalisation. That’s almost the easy bit… clawing back the money extracted rather than invested by past owners is the big ask.

What was even the point of the fines?

Fines should be shares, then held by the government. Every water company failure that results in a “fine” should result in creeping nationalisation. Ultimate failure should result in complete nationalisation of water in that region. The process to take TW into public hands should be started now.

Depends what you expected them to do I guess. I’ll not defend them as they get many things wrong. But were you expecting reduced bills and increased performance and investment?

Its a system issue not just a regulator one; the nature of the industry requires private finance to invest in the business, and nobody is going to invest without a long term promise of a return. Customer bills only cover some of the cost of investment, and a large part of bills cover operational spending and the likes of staff cost, and energy – all of which increase with everything else in the economy. Add in the necessity to improve assets and performance beyond the status quo, and there you have it.

It’s a whole other question whether the system is wrong/broken/fit for purpose. But the fact remains it isn’t going to change any time soon.

Depends what you expected them to do I guess.

Not taking vast sums out of the businesses as bonuses despite not increasing performance or investment (and add to that the ongoing issues with river pollution) would be a good start.

Love the knee-jerk nationalisation reaction. What would it solve, and how? What is the mental arithmetic behind Nationalisation = success? Where would they get the £b’s to run these companies on a daily basis? Is there a Ministry of Water that contains all of the expertise to deliver all this?

Aside form that, it’s not going to happen. Labour have made it clear they won’t do it, and with TW, if it goes into special administration under the government, it would be temporary and all they would do is underwrite their debt and give a haircut to those creditors. Nothing else about how it operates would change.

EDIT – btw, dividends aren’t paid from customer bills, it has to come from ‘unregulated’ money. Ridiculous that it was taken in the first place (thank Ofwat), but it is never going to come back, it’s a laughable suggestion.

A fine example of regulatory capture right there. Absolutely vile, all of it.

Fines should be shares, then held by the government. Every water company failure that results in a “fine” should result in creeping nationalisation. Ultimate failure should result in complete nationalisation of water in that region. T

This is a great idea, best I’ve heard, and actually meaningful!

 Where would they get the £b’s to run these companies on a daily basis?

I’m no expert, but not paying £b’s in dividends could be a good starting point…

Love the knee-jerk nationalisation reaction.

You say knee-jerk, I’d say after observing the industry failures paired with profit extraction over decades.

Is there a Ministry of Water that contains all of the expertise to deliver all this?

The idea that only regional privately owned companies can manage water and waste ignores history and other countries.

Love the knee-jerk nationalisation reaction. What would it solve, and how? What is the mental arithmetic behind Nationalisation = success? Where would they get the £b’s to run these companies on a daily basis? Is there a Ministry of Water that contains all of the expertise to deliver all this?

Look at Scotland.  Water is in state control, its cheaper than england and better

At this very moment an im sitting at home with no acces to water at all, along with 70000+ homes in the new forest area. There is a water collection point 8 miles away which i have just got back from, after queing for 2-3hours. Whilst i understand these things happen, this is the second time this has happened in the last year.

Where would they get the £b’s to run these companies on a daily basis?

Where do the companies get this money from?  Could it be the customer and then a bunch of loans so they can pay out dividends?

Lets just look at todays news about the massive hike in bills to pay for new infrastructure. Note its not paying back those investors who paid up front for it but simply paying for it.

For OP: The problem with removing laws enforcing standards is people might notice and complain. Its far more efficient to defund and disincentivise the regulator from doing their job.

But were you expecting reduced bills and increased performance and investment?

They’ve had the money already – it’s been passed on and not invested in the infrastructure.

I’m not against privatisation – BT was a useless company back before it was sold off. And I don’t think there are many who would argue that the countries communication system is vastly better now. And we have genuine competition.

The water companies are a monopoly and I have no choice but to buy my water from one supplier.

Fines should be shares, then held by the government.

That’s a very imaginative solution to fining companies that directly impacts shareholders and isn’t just passed to consumers. Although it’d make utilities less attractive to pensions investors I suppose.

Not taking vast sums out of the businesses as bonuses despite not increasing performance or investment (and add to that the ongoing issues with river pollution) would be a good start.

That, and also reducing/removing any dividend payments before increased bills.

Love the knee-jerk nationalisation reaction. What would it solve, and how? What is the mental arithmetic behind Nationalisation = success? Where would they get the £b’s to run these companies on a daily basis? Is there a Ministry of Water that contains all of the expertise to deliver all this?

I work in the privatised electricity industry. If my power station was nationalised tomorrow the same experts that run it today would continue to operate and maintain it. The billions to run would come from customers, exactly the same as they do now, but the profits would be re-invested to fix generations of neglect, (water industry, we actually don’t do badly for regulatory compliance and investment)  and bring the standards back to where they should be. Would also give a big bonus to national growth too as this would be massive infrastructure investment for years. Eventually once it’s all sorted profits would then go to the country. I’d love to be effectively a civil servant!

Love the knee-jerk nationalisation reaction.
You say knee-jerk, I’d say observing the industry failures paired with profit extraction over many decades.

Observing industry failures but not understanding the complexities of how it works. I think that’s a large part of the perception of the general public and media reporting, and it doesn’t make for easy or fun reading. But there are so many interacting complexities at play with regulators, government, companies, and customers.

Is there a Ministry of Water that contains all of the expertise to deliver all this?
The idea that only regional privately owned companies can manage water and waste ignores history and other countries.

That’s not what i’m suggesting, but it is where we are at and not going to change any time soon. Of all the possible options for change and reform and their various costs and benefits, what elevates re-nationalisation above any others?

Contrary to what might seem like my tone implies, i’m not defending the industry or privatisation. But taking into account the current and near-term realities, it frustrates me to continually hear the solution to all of Britain’s ills is nationalisation. It’s just an easy word to throw around but is often (and in this case) unrealistic to the point of complete irrelevance.

Back to the original point: in an alternate reality where water companies where still state-owned: would we be living in a water utopia and no bill increases? It’d just be a different focal point for complaint…

it frustrates me to continually hear the solution to all of Britain’s ills is nationalisation.

Lucky its only applied in specific cases then isnt it? Namely the failed monopolies. So not sure how you get to “all”?

Back to the original point: in an alternate reality where water companies where still state-owned: would we be living in a water utopia and no bill increases?

No but we wouldnt have paid out a shitload to the “investors” so it would be a good starting point. Of course if we have governments who hate the public sector they would then suffer but there is a logical answer to that.

Whats your alternative approach? The current one hasnt really worked has it? Well unless you are one of the “investors” and even then its mostly the earlier ones who have cashed in and walked away.

@tjagain

Look at Scotland.  Water is in state control, its cheaper than england and better

Cheaper but not ‘better’. Performance in key areas worse in Scotland, not least leakage, and meter penetration is pitiful so most people are subsidising higher users. Plus they have none/very few of the key challenges most English water companies have around water resources, population growth and economic growth (use of water by non-households)…

Look at Scotland.  Water is in state control, its cheaper than england and better

To be fair you do have a lot more of it

@faustus

The main principal that is pissing most people off is they’ve already had the money. They’ve given huge chunks of it to shareholders rather than invest it.

If they spent more of the billions they’ve received they could address the key challenges.

I’ve lost count of the amount of times Severn Trent have rolled up outside my office to fix leaks in a system that should have been replaced decades ago.

it frustrates me to continually hear the solution to all of Britain’s ills is nationalisation

I agree. But with this industry, if the failings can not be fixed in the public sector, we all still have to purchase from a monopoly provider and live in the environment they pollute. Where companies are failing, and where we have no choice but to use them, and no choice but to pay them, where they have been loaded with debt and huge profits extracted, and where control of our water supply and sewage systems must be continued at “all cost” for health reasons, the requirement for the state to step in if needed will never go away. The question is only at what point should the government step in. With TW that point is now (it should have been sooner). There are other companies that should, barring a miracle turnaround, follow soon after.

and meter penetration is pitiful so most people are subsidising higher users.

There has been zero drive for water meters.  Its just not a thing

Ofwat’s first and most important strategic imperative is to protect the water companies. The regulator can deal with upset members of the public and diminishing environmental performance. Treatment plants with no staff turning up is top right on their risk matrix.

Lucky its only applied in specific cases then isnt it? Namely the failed monopolies. So not sure how you get to “all”?

Back to the original point: in an alternate reality where water companies where still state-owned: would we be living in a water utopia and no bill increases?
No but we wouldnt have paid out a shitload to the “investors” so it would be a good starting point. Of course if we have governments who hate the public sector they would then suffer but there is a logical answer to that.

Whats your alternative approach? The current one hasnt really worked has it? Well unless you are one of the “investors” and even then its mostly the earlier ones who have cashed in and walked away.

Disclosure: yes I am in industry ‘insider’, close to the bottom end of the food chain though! It’s a great thing to be a part of something nearly everyone hates/misunderstands. As an aside, media coverage and attitudes to water companies have driven a significant rise in assaults and attacks on field staff.

I’m just challenging the frequent response on here and in media commentary more widely, calling for nationalisation. I’m a pragmatist, and as explained before, this simply isn’t going to happen in the near-term for the reasons already outlined, so it’s not a realistic or viable option.

What I have in mind is pragmatic improvements and reforms, but it would rely on functioning and funded government and civil service, so nearly as pie in the sky as nationalisation. But a possible direction of travel, rather than an idyll.

Lots of effort (put in by the water companies) playing accounting tricks

https://www.bbc.co.uk/news/articles/cd75nqwdpj7o

As an aside, media coverage and attitudes to water companies have driven a significant rise in assaults and attacks on field staff.

Nothing to do with the failings of the water companies?

What I have in mind is pragmatic improvements and reforms, but it would rely on functioning and funded government and civil service

OK so these are?

Although its a problematic start that your solution to failing private companies is to make the government and civil service do the heavy lifting. If they need to be involved for your plan to work what exactly is the private sector adding?

As an aside, media coverage and attitudes to water companies have driven a significant rise in assaults and attacks on field staff.

And unfortunately your bosses at the top won’t give a shit as long as their bonuses keep rolling in.

Although its a problematic start that your solution to failing private companies is to make the government and civil service do the heavy lifting. If they need to be involved for your plan to work what exactly is the private sector adding?

Some of the lifting, or the bit of the lifting that is entirely their remit to lift. They already are involved, but just poorly and ineffectually. Doing that more effectively shouldn’t be seen as an irony. It’s actually a failing that is part of the wider picture. Defra and EA are all organs of state that very much should have been lifting their share of the load. That’s part of what i’d like to see improved, but I don’t need to serve up an alternative solution, I was just countering the calls for nationalisation as the non-starter it is in this context (and some others).

As displayed on this thread, the blame game lands pretty much everything on the fat cats and evil empires (and some of that is entirely valid, I find it embarassing as an employee). But that’s not the whole picture by any means. In the pursuit of headlines, there is a certain media frenzy that is at odds with/distorts the truth of a very complex issue. And while I just about understand people commenting in the way they have about a rise in assaults on field staff, they don’t stand up to scrutiny and are pretty shameful.

Every single regulator is extremely competent.

They were set up as a toothless token gesture/fig leaf to ensure that private monopolies could funnel as much money as possible into the pockets of its execs and shareholders before the whole ponzi scheme collapses and has to be bailed out by the taxpayer

I’m sure we can all agree that they’re doing a cracking job!

I was just countering the calls for nationalisation as the non-starter it is in this context (and some others).

Whilst nationalising a successful company would be tricky and expensive the scenario is different with the failed companies.
You seem very determined to pass the blame from the companies to the monitors.

Ultimately it shouldnt matter how good a job the regulators do or not. The companies should be capable of acting without that level of supervision. If they cant then really they cant be trusted to run a vital service since its always easier to game a system than it is to bombproof it.

the nature of the industry requires private finance to invest in the business, and nobody is going to invest without a long term promise of a return. Customer bills only cover some of the cost of investment, and a large part of bills cover operational spending and the likes of staff cost, and energy – all of which increase with everything else in the economy. 

My understanding is that Ofwat sets bills at a level which is sufficient to cover all of the water company’s planned expenditure. I can see why they might need some short term financing to cover peaks in expenditure (although with the certainty of their cash flow you’d think a credit facility would be sufficient), but other than that there should be no need to take on any debt.

I think the private owners saw an opportunity to load the companies up with debt and use the money to pay dividends, that debt was never needed or intended for investment in the infrastructure. Now something like 30% of your bill is purely repaying debt which itself was purely paid out as a dividend.

Kiefer Sutherlands Doc Scurlock is the closest but his love for Yen Sun and his need to protect the McSweens leaves him distracted.

The claim of incompetence is based on the assumption that the regulator is there to protect consumer interests.

I thought they are just there to make price rise announcements on behalf of the industry, along with a raft of excuses as to why we pay some of highest prices. Not to mention unveiling their plans to use the moral high ground as an excuse to charge more and more for the little we use.

Having dealt with the financial ombudsman, It was clear they not only know how bad insurance companies are at dealing with claims (they are snowed under with complaints) they have published statistics that point to the exact problems. Yet relatively little is done in a regulated industry, where people are compelled/forced to deal with these **** clowns and the outsourced admin children, employed to filter down the shithouse message to the ingrates.

It appears our beloved corporate betters are allowed to do whatever they like.