United Utilities’ record: not exactly watertight
Article published: Thursday, March 25th 2010
United Utilities CEO Philip Green has pledged to continue the company’s “strong focus on operational performance and cost efficiency” as the financial year comes to an end – a year in which 500 jobs have been ‘lost’ in the past few months. While analysts predict profits approaching £500 million, MULE repubishes this article from the last print edition, which looked at the FTSE 100 company’s social and environmental record in the Northwest over the last few years, where it services over seven million people.
In July last year United Utilities won the Business in the Community (BITC) Company of the Year Award, recognising its high levels of “corporate responsibility”. Philip Green – who happens to be on the Board of Trustees of BITC – said at the time: “I am honoured that the breadth of our company’s environmental and social commitment has been given such significant recognition.”
While people in the UK are relatively far better off than those elsewhere in the world, the company still rinses every possible penny out of the public, which is pretty easy to do when you have a monopoly in the region. For a firm that won a ‘Company of the Year Award’ for its work in the community, UU certainly gets in its fair share of trouble.
In 2007 Ofwat fined the company £8.5 million for breaching industry rules by awarding work to its own subsidiary companies without market testing to ensure value for money.
The regulator’s chairman Philip Fletcher said at the time: “We have warned United Utilities Water over several years and reduced their price limits at successive reviews to protect customers. Despite this the company has continued to trade with associates in a way that, if left unchecked, has the potential to harm customers’ interests.”
Andrea Cook, Chair of the Consumer Council of Water North West, responded by saying Ofwat hadn’t gone nearly far enough: “The North West is a region of high economic and social deprivation. Water debt and affordability are significant and growing issues. We are disappointed that Ofwat did not make more of the opportunity to help consumers.”
Information collated by Ethical Consumer shows how, over the last few years, the company has been subject to dozens of fines worth tens of thousands of pounds for pollution and release of raw sewage; providing unfit water for customers and failing to cut leaks sufficiently.
UU is currently facing a potentially huge legal claim following the November floods in Cumbria. A group of people, represented by law firm KJ Commons & Co, claim that the company released water from its Thirlmere Reservoir during the heavy rain, knowing it would significantly worsen the flooding.
CEO Green is vigorously protecting his company, which is prepared to defend itself against any legal action. He stated, “We do not believe that UU deliberately exacerbated the flooding.”
Meanwhile, the North West Regional Development Agency (NWDA) recently awarded UU £200,000 from its Carbon Challenge Fund, which it says will improve efficiency, reduce costs and safeguard jobs. It must be hoped this will happen. It’s hard to imagine how fewer staff will help UU’s services and its fairly poor environmental record to date.
Andy Lockhart
See MULE’s previous article on the job cuts at United Utilities, also from the print edition, published at the beginning of March.
More: Features, Manchester
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