Defra has today published its review of Ofwat, assessing whether the economic regulator for the water sector is fit for future challenges.
The review, led independently by David Gray, was launched by the UK Government and Welsh Government in August 2010 as a ‘health check’ of the existing arrangements ahead of the publication of the UK Government’s Water White Paper later this year and to inform the development of Welsh Government’s future policies on water.
The review looked at Ofwat’s role, how it works with others and if its regulatory approach is delivering what the Government and customers expect. The review also considered the arrangements for representing customers in the water sector, currently undertaken by the Consumer Council for Water.
The main conclusions are that regulation in the water sector has worked well since privatisation and that major change is not needed to the statutory framework or regulatory landscape; but that to achieve continued success, Ofwat needs to see through the changes it has embarked on to reduce the burden of regulation it imposes on the water industry and work constructively with the other organisations in the sector.
The review team also considered existing and alternative approaches for consumer representation and recommended to the UK and Welsh Governments, that the functions the Consumer Council for Water carries out in protecting water customers be retained preferably within CCWater.
The Coalition Agreement committed to reform the water industry to ensure more efficient use of water and the protection of poorer households. UK Ministers will respond to the Review’s recommendations in the Water White Paper to be published later this year. Welsh Ministers will decide on how to respond to the recommendations in due course.
The review can be viewed here: www.defra.gov.uk/environment/quality/water/industry