School of Business and Economics

News

15 May 2018

Loughborough University unveils UK water industry performance and cost assessment event

Kitchen faucet

With the Water Services Regulation Authority for England and Wales, or Ofwat, finalising its 2019 Price Review, the issues surrounding ownership, profits versus costs, improvements and regulation have been highlighted with increasing frequency in the media.

Water industry expert Professor David Saal, Co-Director of the Centre for Productivity and Performance (CPP) at the School of Business and Economics, Loughborough University, has organised a workshop on May 23rd on the UK water industry with senior representatives confirmed from Ofwat, the Water Industry Commission for Scotland, Anglian Water and Severn Trent Water, as well as top academic and consultancy experts.

The Workshop, which will be opened by Professor Steve Rothberg (Pro Vice-Chancellor for Research, Loughborough University), is divided into three sessions:

  1. A morning panel discussion on ‘Water Industry Performance – Lessons from Different Countries and Ownership/Regulatory Models’ chaired by Professor David Parker, Cranfield University;
  2. An afternoon panel discussion on ‘Water Industry Cost Assessment for 2019 – Academic, Industry and Regulatory Perspectives’ chaired by Professor Monica Giulietti, Loughborough University; and
  3. A roundtable on ‘The Implications and Outcomes for PR 2019 and Beyond’.

Professor Saal said:

“As a Co-Director of the CPP it gives me great pleasure to host such a topical event at Loughborough University. We have key players in the industry presenting their own views on the issues where we have also contributed significant research and expertise.

“Given the current Ofwat consultation on cost assessment, the Workshop is well placed to provide important insights into the process and influence the outcome of Ofwat’ s final price determination in December 2019.

“Water regulation must balance the need for fair water prices for consumers against the need to adequately fund water services and environmental improvements.  In this light, the workshop will consider important links between productivity, financial performance, and consumer prices that need to be considered by Ofwat in its 2019 price determination.”

Professor Saal, an expert on productivity, cost modelling and regulatory economics, whose research on the water sector spans the last two decades, recently finalised a report with Frontier Economics commissioned by Water UK on productivity trends in the English water and sewage industry since privatisation.  This report, which found evidence of reduced productivity growth in recent years, informs the current debate with regard to both price setting by Ofwat (PR 2019) and issues of ownership.

David and CPP colleagues Dr Maria Nieswand and Dr Alessandra Ferrari have also been working in close cooperation with Anglian Water on its regulatory cost assessment modelling for PR 2019. Via its contribution to influencing Ofwat’ s regulatory cost assessment , which is an important part of PR 2019, this work will directly impact the prices paid by consumers for water and sewage services in England and Wales from April 2020.

Both research projects are a key feature of the May 23rd Workshop.

Contributing to the afternoon session on Cost Assessment will be Dr Anthony Glass and Dr Karli Glass, who are also members of the Centre for Productivity and Performance. They will be presenting alongside consultancy firm Economic Insight the 2018 Household Retail Cost Assessment report for Bristol Water and Wessex Water, which they worked on last year and submitted to Ofwat’s cost assessment consultation.

You can watch the short promotional video on the Workshop here.

The Centre for Productivity and Performance is a key part of the University’s Decision Sciences Ambition led by the School of Business and Economics.

Professor Saal and the Drs Glass are members of the organising committee for the 2019 European Workshop on Efficiency and Productivity Analysis (EWEPA) which Loughborough University will host in London in June 2019. EWEPA is the flagship European conference in the area of efficiency and productivity analysis.

  • To download Anglian Water’s initial cost modelling report (published Sept 2017) and CPP’s 32-page review of this modelling, click here
  • To download Anglian Water’s revised models developed in partnership with the CPP (published March 2018), click here
  • To download the report from Frontier Economics commissioned by Water UK (which Professor David Saal was a lead author on, published November 2017), click here
  • To download the report from Economic Insight on behalf of Bristol and Wessex Water (informed by Drs Anthony and Karli Glass, published March 2018), click here.