Water industry reaffirms pledge to work in the public interest

Water companies in England are strengthening their ongoing commitment to working in the public interest and placing wider good at the heart of everything they do. The companies have agreed a series of pledges which form part of a new Public Interest Commitment, published today, which complements their individual business plans by showing leadership at a national level.

The sector will champion measures through which water companies can enshrine what it means to operate in the public interest within their business purpose, in line with best practice among leading socially-responsible businesses. This could include steps such as amending licences or Articles of Association.

Over the last 30 years, private water companies have brought major benefits to consumers and the environment alike. As the industry looks ahead to the next 30 years companies recognise that customers and stakeholders expect them to do more.  The aim of the sector is to work together, and with independent external bodies, to meet these high expectations.

As part of the Public Interest Commitment water companies have also agreed to work together towards five challenging goals:

• Triple the rate of leakage reduction across the sector by 2030
• Make bills affordable as a minimum for all households with water and sewerage bills more than 5% of their disposable income by 2030 and develop a strategy to end water poverty
• Achieve net zero carbon emissions for the sector by 2030
• Prevent the equivalent of 4 billion plastic bottles ending up as waste by 2030
• Be the first sector to achieve 100% commitment to the Social Mobility Pledge

A programme of work to help achieve each of the above goals will be led by a member of the Water UK board and an independent panel will be established to report annually on how well the sector is performing collectively.

The Public Interest Commitment has been created by the water industry following companies’ ongoing dialogue with customers, which revealed that they would like the water industry to do more, not just to improve services, but also to play a full role in tackling wider social and environmental challenges.

Based on the feedback from communities and national stakeholders, the ambition for the sector is to represent the best in responsible business practice. That means going beyond just regulatory compliance to demonstrate long term stewardship of the environment, deliver social good and give people a meaningful say as companies decide their priorities.

The precise way in which each company does that will vary to reflect the priorities of their local communities. Following the sector’s biggest-ever customer engagement programme, the improvements recently set out in companies’ five-year business plans to 2025 sit at the heart of the commitment, individually and collectively, to reinforce the water industry’s contract with society. The initiative comes at a time when Ofwat is preparing shortly to set out how all players in the water sector can come together to create a shared vision for its future.

Commenting on the publication of the Public Interest Commitment, Michael Roberts, Chief Executive of Water UK, said:

“The water industry takes its responsibility very seriously, because we play a unique role in running a vital public service for the public good. Water companies individually have set out proposals to improve services over the next 5 years in their business plans, and the Public Interest Commitment is about companies working together to build on those ambitions. It commits us to reinforce the public interest at the heart of everything we do, and to strive towards a set of challenging sector-wide goals which will benefit customers and the environment.”

The specific pledges in the Public Interest Commitment, with more detail, are:

• Triple the rate of sector-wide leakage reduction by 2030. As part of a wider long-term strategy to reduce per capita consumption of water and invest in more water transfer and storage, this goal represents an unprecedented rate of improvement to help us to meet the unprecedented challenges posed to water supplies by climate change and population growth.
• Make bills affordable as a minimum for all households with water and sewerage bills more than 5% of their disposable income by 2030 and in future end water poverty. This requires a package approach tailored to local needs, including measures such as helping customers to be more water efficient, providing social tariffs and additional forms of financial assistance, and working with other organisations to support customers in vulnerable circumstances.
• Achieve net zero carbon emissions for the sector by 2030. As energy-intensive businesses we have an important contribution to make in tackling the causes of climate change.  We can make a real difference through measures such as greater water efficiency, buying green energy as well as generating renewable energy ourselves, planting trees and working with our supply chain.
• Prevent the equivalent of 4 billion plastic bottles ending up as waste by 2030. We will end the use of avoidable single-use plastics in our businesses and support the contribution which the public can make by providing water refill facilities and through education.  Our ambition is to be world-leading in the role water companies can play in the wider campaign to cut down on plastic pollution.
• Be the first sector to achieve 100% commitment to the Social Mobility Pledge. Along with investment in skills, this is part of our wider aim to promote opportunity in local communities and increase talent and diversity within companies.  The Pledge commits to action in three areas – partnering with schools or colleges to provide coaching, providing structured work experience and/or apprenticeship opportunities, and adopting open employee recruitment practices – all aimed at people from disadvantaged backgrounds or circumstances.

Since privatisation 30 years ago the water industry has delivered huge benefits for consumers and the environment. Today, customers enjoy world-class water quality while record investment has seen leakage drop by a third.

The water industry in England and Wales has spent around £160 billion improving pipes, pumping stations, sewers and treatment centres since privatisation. Customers are now 5 times less likely to suffer from supply interruptions, 8 times less likely to suffer from sewer flooding, and 100 times less likely to have low water pressure. Water companies have also reduced leakage by a third since the 1990s, and it continues to be a top priority. Well over £2.5 billion has been spent since the 1990s to protect UK bathing waters and as a result two thirds of UK beaches are now classed as excellent, compared with less than a third 25 years ago.

At the same time wildlife has returned to rivers that had been biologically dead since the Industrial Revolution. Bills are broadly the same as 20 years ago once inflation is taken into account, and 86% of customers say they trust their water company.