Our experience – Water
Sir Ian Byatt, the Director General of Water Services was Indepen’s first regulator client in 1990 and we worked at Ofwat until 1996. We have subsequently worked for other water regulators including an extensive programme for the Essential Services Commission in Victoria, Australia. In 1996 we decided to develop our work with regulated businesses and succeeded in gaining good relationships with a number of water and sewerage companies and water only companies with whom we have worked subsequently.
Ways in which we work in the sector
- Business and regulatory strategy
- Indepen advised a client in a range of areas to help improve its overall performance. This included regulatory strategy and policy, organisation and management, regulatory planning and performance management and regulatory engagement. A separate team worked on the disposal of the company by its owner.
- Public and regulatory policy
- We advised on a water client’s positioning, strategy, stakeholder management and business plans for their review of prices and on the development of the water sector and regulatory regime, including the implications of new legislation, the overall governance and financial framework for the sector, and the development of a new regulatory regime appropriate for a publicly owned enterprise.
- Stakeholder engagement
- We advised the newly appointed Chief Executive on regulatory issues, including regulatory strategies for negotiations with Ofwat, the Environment Agency and the Drinking Water Inspectorate. Under its previous management team the company’s relationships had deteriorated and its draft business plan submissions had been very poorly received by the economic and quality regulators. We worked with the new team and the regulators to improve relationships and understanding of the issues on both sides with the consequence that the final determination was well received by shareholders and other stakeholders.
- Board services
- We advised a client during its change of ownership and led the development of regulatory strategy for the company’s negotiations with Ofwat, the Environment Agency and the Drinking Water Inspectorate. As part of our work we carried out a review of the company’s corporate risk management processes and implemented new structures to manage the risks identified by the review.
- Performance and value
- We were sponsored by four water companies to provide clarity over Ofwat’s approach to assessing efficiency and its application in price setting and to review the evolution of Ofwat’s approach given the significant literature in this area. We also captured the views of academics that work in this area. At all stages we worked closely with the sponsors, Ofwat and Water UK. Each of the parties was involved in scoping the review and had an opportunity to review and comment on the findings.