Water Services Regulation Authority

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OfWat was created with the primary duty to ensure the profitability of the water companies, and a secondary duty to protect the interests of customers. This Thatcherite approach believes that the intrinsic merits of private ownership were sufficiently intense to relegate all other considerations – affordability, health and customer protection – to little more than side-issues. ref, p.10

OfWat is a non-ministerial govt department, established in 1989 when the water and sewerage industry in England and Wales was privatised. It is responsible for economic regulation of the privatised water and sewerage industry in England and Wales. OfWat's prime responsibility is for setting limits on the prices charged for water and sewerage services, taking into account proposed capital investment schemes (such as building new wastewater treatment works) and expected operational efficiency gains. Reviews are carried out every 5 years; the last one was in 2014; thus the next will take place in 2019.[1]

Ofwat consists of a board, plus an office of staff which carries out work delegated to them by the board.

The Environment Agency is responsible for environmental regulation, and the Drinking Water Inspectorate for regulating drinking water quality. The Water Industry regulator in Scotland is the Water Industry Commission for Scotland.

Funding

OfWat is financed by licence fees charged to the water companies.[2]

Timeline

ToDo:


Articles

  • Dec.15.2018: ‘It’s essential to life’: Ofwat’s Rachel Fletcher sets a new course for water. Rachel Fletcher says water is “essential to life – not just another commodity. She insists the Water Industry is at an inflexion point. Gone are the days when loopholes would allow a company like Thames Water, under its previous owners, to load up with debt, financially engineer high returns and route the resulting dividends through tax havens. She argues that the water industry – including other big private names such as Severn Trent, United Utilities and Anglian Water – is in the throes of a makeover. Most (but not all) of its chief executives no longer see their role as simply running water through pipes, conforming with the letter of regulation if not the spirit and aiming to maximise short-term profits. Water shortages are our future, population expansion. A way has to be found to ensure that the water-rich parts of the country are connected with the water-poor – yet today the privatised companies only trade 4% of their water elsewhere. A water grid? The regulator’s chief executive has a striking social agenda for utilities once notorious for focusing on profit. Will Hutton, The Guardian.
  • Jul.19.2017: OfWat chief quits for private sector job. Cathryn Ross, who led water regulator through 2014 price review, is praised as ‘transformational leader’. She is leaving at the end of the year to join BT and lead its battle with OfCom, the telecommunications regulator. Cathryn Ross, who has run OfWat for nearly four years, is understood to have been appointed by BT to head its regulatory affairs operation. Under Ofwat proposals published last September, households would be able to choose their water supplier for the first time. Extending competition, it said, would cut household bills by about £8 a year and improve services. The govt has yet to decide whether to adopt the proposals. At the moment, homeowners can only buy water from a handful of regional suppliers such as Yorkshire Water, Severn Trent or Thames Water. But the report by OfWat recommended an overhaul of the industry to encourage new entrants. Julia Kollewe, The Guardian.

References

  1. ^ Our duties. OfWat, Gov.uk. Accessed Apr.28.2018.
  2. ^ Who we are. OfWat, Gov.uk. Accessed Apr.28.2018.