The Woes of Water: Lessons for Stakeholder Management

Written by Rhion Jones | 27 August 2025

Anyone who has waded through the 464 pages of Sir Jon Cunliffe’s recent Report on the Water industry in the UK will have felt submerged by the sheer scale and extent of the problems that this privatised utility has encountered.

Without drowning in the detail, it is fair to summarise that the public has lost patience with a vital industry that seems to be unfit for purpose, with everyone blaming everyone else.

Bills are too high - and going higher. Rivers are more polluted, with unhealthy discharges increasingly visible to the public. Infrastructure projects are delayed due to inadequate water or sewerage capacity. Some water companies are financially stretched. And the politicians want to fine, penalise or even jail the managers!

And in the middle of this mess are hard-working professionals trying to manage an over-complex set of overlapping stakeholder relationships that, for the most part, still succeed in delivering safe drinking water to households almost everywhere, and effective disposal of wastewater on most occasions.

How do we make sense of it all? For all other stakeholder managers in challenging situations - either in public services or delivering significant infrastructure projects - there can be some emerging lessons.

Five lessons for stakeholder managers

1. Navigate the communications maze

Piecemeal regulation is often a disaster. Just ask the NHS, which is finally rationalising its overlapping checks and balances (even though abolishing Healthwatch is an obvious mistake). There are just too many separate bodies. It means organisations have to build and maintain relationships with hundreds of contacts that can affect their business, and all are pursuing legitimate – but narrow – interests.
England’s water industry is awash (sorry!) with responsibilities that are divided between the current lead regulator (OfWAT), the separate Drinking Water Inspectorate, the Environment Agency, DEFRA ( i.e. Ministers), the local planning authorities and many more, and Cunliffe’s recommendations will partly address the problem.
In the meantime, as in other complex regulated environments, it’s important to map the relative roles and status of each interface to plan realistic communications with them.

2. Avoid the blame game

When politicians blame an industry for problems they have often created themselves, it is tempting to use Corporate communications and PR teams to pursue the debate by joining in the ‘blame game’. It often makes matters worse! There is a difference between a considered factual rebuttal and an over-defensive media campaign.
Stakeholder managers need to build trust even with vociferous critics and need to work closely with communications specialists to strike the best balance of messaging. In the Water industry, trade bodies like Water UK have made their case for years. It has not prevented poor Government decisions such as prioritising short-term price restraint at the cost of lower long-term investment.

3. Transparency over defensiveness

Public trust and confidence are impacted by perceptions that an industry thinks it knows best!
Practices such as ‘Operator self-monitoring’ for wastewater discharges were introduced partly as cost-reductions, but also because international evidence suggested that they provided a better focus on the most problematic and high-risk areas.
In the UK, this does not work because our vigilant media and scores of voluntary bodies and campaigners in the public amenity space lost confidence in the privatised Companies and could show that the official statistics under-reported serious problems. It was seen as ‘marking your own homework’ and is a great reminder to Stakeholder Managers to stress a willingness to listen and be open to objective scrutiny. Organisations that become known for being defensive and nervous about external criticisms ultimately lose support.

4. Make engagement meaningful

One of the less satisfactory situations that evolved over many years in the water industry was a confusing mishmash of public engagement. An example is the cycle of River Basin management consultations run by the Environment Agencies in Wales and England. They are resource-intensive and appear to have little influence on the actions and priorities of the water industry.
If consultations are ineffective, it is better not to do them at all. Stakeholder managers frequently find themselves investing in processes that have either been discredited or have little ‘added value’.
Whilst organisations disregard statutory or regulatory requirements at their peril, it is time to be realistic about allocating relationship priorities. Mature relationships must accommodate change - and sometimes anticipate it.

5. Know your facts

A persistent criticism of the industry has been that it has often not known enough about the state of its own infrastructure! It has led to miscalculations about the amount of maintenance required for water mains and treatment works, and clearly damages public perceptions.
For those needing to represent the Companies and other agencies working in the industry, it is a timely reminder that your credibility relies heavily on having a sound understanding of the facts. The asset base of an organisation is not just physical, but increasingly includes information and ‘intellectual property’.
Those managing stakeholder relationships do not necessarily need to know detailed technical data - but they need to demonstrate that it exists and that someone is capable of intelligently using it.

The Water industry is not unique in having systemic long-term problems that will take years to resolve. Think of the Post Office. Or our Courts and prisons. Many people blame it on successive layers of bureaucracy imposed by Governments, but these have often been introduced in response to public concerns and changing aspirations.

So much of what Cunliffe has revealed has been known for a while, and provided its 88 recommendations are not watered down too much (sorry again), there is hope for this troubled industry.

Working in dysfunctional systems can be frustrating and, as in the Water industry, it has taken a comprehensive review by heavyweight experts to assess the cumulative impact.

Maybe, however, astute stakeholder managers are amongst the best-placed to see the bigger picture and identify where improvements are needed. They can spot the misalignment of objectives, the counter-productive processes and the perverse incentives.

Armed with effective systems, good training and a culture of best practice, Stakeholder Management can make a tremendous contribution to a decade of recovery in this and other industry sectors.

Written by Rhion Jones

Rhion Jones was the Founder Director of the Consultation Institute and is an acknowledged authority on all aspects of public and stakeholder engagement and consultation. He advises Tractivity and will be contributing expert analysis and commentaries on current issues.

Rhion now publishes thought leadership articles regularly as the Consultation Guru.

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