Water companies in the UK must involve customers and listen to their views in key decisions that have a material impact on them.
That’s according to Ofwat in its newly-launched consultation, following new powers granted to the regulator by the government to issue rules about remuneration and governance.
The consumer involvement rule covers three areas: ensuring companies take decisions with an informed understanding of consumers’ views and preferances, creating decision-making arrangements within companies that involve consumers and improving firms’ understanding of the impact of past decisions on consumers.
Joint research conducted with the Consumer Council for Water (CCW) found consumers see a role for the public to bring changes in the water sector and want to hold companies accountable where they perform poorly and have the greatest impact on the public or environment.
Ofwat is seeking views on its proposed rules until 1st October 2025.
The regulator has already implemented the first rule issued under the new powers – the performance-related pay prohibition rule, under which it has banned unjustified executive bonuses in the water sector.
It states: “Following the publication of the Independent Water Commission final report, the UK Government has set out a new direction for the water sector with the formation of a new regulator in England. This marks an opportunity to reset the sector so it delivers better outcomes for customers and the environment. As the report states, this rule aims to strengthen consumer representation by offering direct engagement with consumers.
“Until these new arrangements are in place, we will keep working hard to drive water companies to improve performance and deliver maximum value for customers, communities and the environment.”
