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Ofwat in hot water with MPs

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A SENIOR MP this week accused water regulator Ofwat of giving water companies an easy ride over their failure to cut leaks.

And another claimed the regulator has handled Thames Water, which has the worst leakage record, with kid gloves when it should be getting tough.

The criticisms surfaced at a Commons Public Accounts Committee meeting on Monday, when committee chair Edward Leigh and his colleague Sadiq Khan rounded on Ofwat chairman Philip Fletcher and chief executive Regina Finn.

'The kid gloves with which you handle Thames Water in particular each year leads us to wonder whether you are not just a soft touch to these companies, ' said Leigh.

Committee member Khan expressed doubts about Ofwat's effectiveness. He said questions had been asked in the Commons 'about the value that regulators get for their customers'.

Khan said Ofwat had failed repeatedly to get the UK's three worst performing water companies - Thames, United Utilities and Severn Trent Water - to meet leakage reduction targets. Yet those companies were earning large profits.

'There's room for improvement in the way Ofwat works, ' Fletcher conceded.

But he said that Ofwat's power to fine companies was constrained by the existing legal framework within which the regulator operates.

Ofwat had sought to fine Thames Water for missing leakage reduction targets each year for the past five years. But the regulator has failed to win the necessary support from judges to carry through and impose a penalty, Fletcher said.

The legal framework is being reviewed, he added.

Leigh also expressed anger at the fact the Fletcher and Finn were unable to tell the committee how much profit the UK's 22 water companies had made last year. 'You are there to represent our interests as consumers, ' he said.

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