Water Regulator to be Reviewed

The economic regulator was set up 20 years ago at the time the water industry was privatised, to ensure customers receive good services at a fair price. The independent body can take action against companies that fail to deliver this.

Environment Secretary Caroline Spelman said: ‘Ofwat has been successful in holding down household bills while water companies invest in their infrastructure. But we need to make sure the regulator is in good shape to help the industry prepare for a changing climate and a growing population, at the same time as keeping bills affordable. It's important to reassure water companies and bill payers that Ofwat provides good value for money by carrying out its duties without unnecessary red tape.'

Defra (Department of Environment, Food and Rural Affairs) has engaged David Gray to act as lead reviewer. Mr Gray brings with him recent experience from the Department for Transport's review of airport regulation and widespread knowledge of financial markets, government and utility sector regulation. The review team will call for evidence to give customers, water companies and their investors a chance to influence the review.

The process, due to be completed early next year, will examine the role of Ofwat. This will include its objectives, its responsibilities and how it will meet future challenges and ensure value for money. The review will also look at how well the current arrangements, involving Ofwat and the Consumer Council for Water, work in protecting water customers and in making sure their views are heard.

Defra is also due to publish a Water White Paper early next summer which will set out policies for the future of water management.

Source: Institute of Water