Ofwat chair wades into new controversy

Water regulator is accused of conflict of interest over appointment to advise US fund looking to invest in utilities

Britain’s top water regulator has been drawn into a conflict-of-interest row after taking an outside job with a $2bn (£1.2bn) New York fund looking to invest in European utilities. Jonson Cox, who has been Ofwat chairman for a year, agreed to join the former UN secretary general Boutros Boutros-Ghali as an adviser to Squared Capital earlier this month.

The move has infuriated the water companies Mr Cox regulates. One senior water-industry source said: “How on earth can a regulator be an adviser to a fund that invests in regulated utilities?” The accusations come at a delicate time for Mr Cox, as he is pushing water utilities to lower bills in 2015-20 and demanding that they “build trust” with their customers.

Ofwat insisted that Mr Cox would not be advising I Squared on the UK’s water industry, with a prohibition of discussing that sector written into his contract.

His critics argue that trust in Mr Cox has been undermined by the appointment. They say a regulator should not be allowed to work for a group that could potentially invest in British utilities and infrastructure. Rival investment firms worry that the appointment could give I Squared an edge on certain deals.

“It’s not just industry who worry about his judgement. It’s the financial community which is behind future investment in the water business – or not. The biggest issue for them is trust in the regulator. And this is just the sort of thing that spooks investors,” one executive said.

Gary Smith, the GMB union’s national secretary for utilities, was also dismayed by the appointment. “This is absolutely disgusting and is also very dangerous for a regulator in terms of transparency. People will think it stinks that a regulator who is supposed to be there to protect consumers is now advising companies who seek to profit from them on regulatory regimes,” he said.

I Squared, which was formed this year by a group of former bankers at Morgan Stanley, says it is looking to Mr Cox’s expertise in industrial sectors in which he has “relevant experience”, according to minutes from a recent Ofwat board meeting. 

Its managing partner Sadek Wahba said that Mr Cox “has a unique combination of regulatory as well as operational experience in the infrastructure sector”.

Mr Cox was chief operating officer of Railtrack, before being fired in 2001, and spent the early part of his career at the oil giant Royal Dutch Shell. However, he is best known for his work in water utilities, having led Anglian Water from 2004 to 2010.

In barely 12 months at Ofwat, where he is paid a six-figure salary for a three-day week, Mr Cox has already courted controversy. Earlier this year he was accused of hypocrisy after criticising “morally questionable” tax structures in the sector, even though Anglian Water had paid only £1.6m in corporation tax during his six years in charge.

An Ofwat spokeswoman said:  “Jonson Cox has been appointed on a 12-month contract to an international advisory panel for I Squared, a US-based investor in asset-based industries. The agreement with I Squared fully recognises Mr Cox’s Ofwat appointment and that he will not be providing advice on the UK water sector. This appointment was cleared in advance by government and was also declared in advance to the Ofwat board in October.”

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
peopleMathematician John Nash inspired the film Beautiful Mind
News
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Life and Style
Audrey Hepburn with Hubert De Givenchy, whose well-cut black tuxedo is a 'timeless look'
fashionIt may be a paradox, but the industry loves it
Arts and Entertainment
The pair in their heyday in 1967
music
Life and Style
fashionFrom bathing dresses in the twenties to modern bikinis
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Guru Careers: Software Developer

£35 - 40k + Benefits: Guru Careers: We are seeking a Software Developer (JavaS...

SThree: Trainee Recruitment Consultant / Resourcer

£18000 - £23000 per annum + Commission: SThree: As a Trainee Recruitment Consu...

Ashdown Group: UI Developer - (UI, HTML, CSS, JavaScript, AngularJS)

£25000 - £40000 per annum: Ashdown Group: UI Developer - (UI, JavaScript, HTML...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine