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Of course, Ofwat don’t make it easy. This is, after all, a
quango with an annual budget close to £40m so no surprise that I had to
read 33 pages of dense, management-speak rich text to at least part
understand the process that took Ofwat to that £67m figure which, by the
way, represents less than half of one percent of total annual water bills
in England and Wales. Literally and figuratively a drop in the bucket but
let’s continue as that ODI determination process highlights how skewed the
regulation process is against dealing with water pollution issues.
I will put you out of your agony and not save ODI for the
quiz; it means outcome delivery incentives. Basically, it is the measure as
to whether the 17 regional water and wastewater companies in England and
Wales stick to the pledges made to their customers and stakeholders at the
2019 price review about progress towards service level commitments. [Sorry,
I could not better rewrite that bit of quango speak]. If they do well (!)
they can charge you, the customer, a bit more next year. If they do badly
they have to give you back a bit of what they charged you last year. Yes,
it really does work that way.
You’d have thought the ODI measurement would be pretty
simple. Clean water into homes and businesses through pipes that didn’t
leak too much. And then return that water to rivers and seas in a state a
reasonable person might consider clean. As the youth would say, LOL.
But no. These are some of the outcomes by which the
companies are measured: education performance. Visitors to recreation
sites. Use of renewable energy. Greenhouse gas emissions. Per capita
consumption. To be fair bathing water performance was included but five
companies declined to offer any data (including Southern Water) in 2020/21
as the Environment Agency sampling regime was constrained by Covid. If
there was any performance target required for clean rivers I could not find
it.
So, there you have it. Performance targets that largely
measure the outcomes that don’t address the basic problems of pollution. It
is a typical Ofwat monopoly producer led fudge designed to muddy the
waters; you get brownie points for a super-efficient pump that uses green
energy even if that pump is spewing out thousands of tonnes of sewage.
You have to ask whether this whole process is worth the
effort; it seems to be largely a PR effort by Ofwat to position themselves
as the champion of the consumer against big water. The news release is
heading in that direction by trumpeting the £67m that will be returned to
some whilst being very coy about the fact that an extra £68m will be
charged to others.
I’m sure if Johann Georg Schröpfer was alive today, the
illusionist who invented the technique of smoke and mirrors in the 18th century to bring his seances to life,
would consider ODI a worthy 21st century iteration of his nefarious
craft.
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