Severn Trent Water - Our industry
The achievements of the water industry in the 20 years since privatisation are well documented – service to customers has improved, new drinking water standards have been met, tighter environmental standards have been achieved and new investment attracted.
These successes have been driven by an effective regulatory framework which has incentivised companies to become more efficient, so keeping bills lower than they would otherwise have been. The framework has also provided investor confidence, allowing companies to attract financing for an investment programme of around £85 billion over the last 20 years to deliver the improvements.
However, the successes of the last 20 years have not been without consequences. Water company debt has increased significantly, customers face higher bills and carbon emissions have increased.
In addition, there is a significant projected level of capital investment required over the next 20 years to deliver further statutory environmental improvements and adapt our services and provide asset resilience in the face of climate change.
Changing course
Given these circumstances, we believe now is a critical time for all of us with a stake in the industry to question what future direction we should take. We have therefore developed our position on these issues and published a report, entitled ‘Changing Course: Delivering a sustainable future for the water industry in England and Wales’, which sets out six key changes we believe are required to meet these continuing challenges.
We believe that implementing these changes would deliver better outcomes for customers, investors and the environment. The report is available on our website, www.stwater.co.uk/changingcourse
We have engaged with our key stakeholders, including those described above, in developing our thinking and we believe there is a degree of consensus about the need for, and the direction of, change.
We will continue to develop our thinking on these issues and work with our stakeholders to influence the way in which the sector develops.
Changing course – six key changes required to meet future challenges
Policy changes- More flexible implementation of EU Directives to ensure a better trade off between costs and carbon emissions.
- Developing competition through water trading, which would also optimise resources nationally rather than just regionally.
- A more flexible approach to environmental consents to allow for more cost effective approaches.
- An improved price setting process to provide the right incentives for sustainable financing, more sustainable solutions and increased innovation.
- Companies must take the lead in driving innovation, both in terms of the strategic and technical solutions they pursue and in shaping the wider direction the sector takes.
- Government should prioritise national policy outcomes and ensure the regulatory framework is set up to deliver them.
Utility Company of the Year
Severn Trent Water was named Utility Company of the Year in December 2009.