Ofwat
![]() | |
Agency overview | |
---|---|
Formed | 1 April 1989 |
Preceding |
|
Type | Non-ministerial government department |
Jurisdiction | England and Wales |
Headquarters | Centre City Tower, 7 Hill Street, Birmingham, B5 4UA |
Employees | 226 |
Annual budget | £19.1 million (2011-2012)[1] |
Agency executive |
|
Parent department | Department for Environment, Food and Rural Affairs |
Website | ofwat |
TheWater Services Regulation Authority,orOfwat,is the body responsible for economic regulation of the privatisedwaterand sewerage industry inEnglandandWales.Ofwat's main statutory duties include protecting the interests of consumers, securing the long-term resilience ofwater supply and wastewater systems,and ensuring that companies carry out their functions and are able to finance them.[2]
Ofwat primarily sets limits on the prices charged for water and sewerage services, taking into account proposed capital investment schemes (such as building newwastewater treatmentworks) and expected operational efficiency gains. The most recent review was carried out in 2019; reviews are carried out every five years, with the next due to take place in December 2024.[3]
The Water Act 2014 extended retail competition to all non-household customers of English water companies from April 2017 and provided for possible future competition inwholesalemarkets.[2]Ofwat's role includes regulating such water and wastewater markets and promoting effective competition wherever appropriate.[4]
Ofwat consists of a board, plus an office of staff which carries out work delegated to them by the board.
TheEnvironment Agencyis responsible for environmental regulation, and theDrinking Water Inspectoratefor regulating drinking water quality. Water in Northern Ireland is regulated by the Northern Ireland Authority for Utility Regulation, and the supply and treatment is carried out by the government-ownedNorthern Ireland Water.There is no separate charge for water for residents or companies in Northern Ireland. Instead, water is paid for by theratessystem. Thewater industryregulator inScotlandis theWater Industry Commission for Scotland.
History
[edit]Ofwat was set up in 1988, at the same time as 10water authoritiesin England and Wales were privatised by flotation on the stock market. Its duties and powers are defined by theWater Industry Act 1991.The resulting companies are known as "water and sewerage companies"; this distinguishes them from around a dozen smaller companies which only provide water services, which were already in private hands in 1989 (having remained in private ownership since their creation in the 19th century). The water-only companies provide water to around 25% of the population in England and Wales.
Before 1 April 2006, all regulatory powers rested with the Director General of Water Services. The staff who supported the role of the Director General were collectively known as the "Office of Water Services", which was abbreviated to "Ofwat".Ian Byattwas the Director General between 1989 and 2000;Philip Fletcherwas Director General until 2006 and chairman until 2012. On 1 April 2006, the Director General was replaced by the Water Services Regulation Authority.[5]The name "Office of Water Services" is no longer used, as it had no legal basis.
Key people
[edit]The current chairman isIain Coucher,who took up his position in July 2022,[6]replacing Johnson Cox who had held the position since November 2012.[7]Initially taking over from Rachel Fletcher as interim chief executive in April 2021, the current chief executive is David Black who was fully appointed to the role in April 2022.[8][9]
Price reviews
[edit]Every five years, Ofwat set limits on the prices which water companies in England and Wales can charge to their customers; this process is known as a price review or periodic review.[2]Ofwat has carried out six price reviews so far – in 1994 (PR94), 1999 (PR99), 2004 (PR04), 2009 (PR09), 2014 (PR14) and 2019 (PR19). The most recent, PR19, set price limits for 2020–2025. Ofwat sets a so-called "K factor" in companies' licences which determine the average value of price rises above the rate of inflation (RPI) for the next five yearasset management plan period.[10]
See also
[edit]References
[edit]- ^Ofwat Annual Report and Accounts 2011-2012(PDF),Water Services Regulation Authority, 19 July 2012,retrieved9 July2013
- ^abcThe economic regulation of the water sector(PDF)(Report). London: National Audit Office (UK). 8 October 2015. HC487.
- ^"Price reviews".London: Ofwat.Retrieved29 January2023.
- ^"Our duties".London: Ofwat (Water Services Regulation Authority).Retrieved23 August2021.
- ^s36 Water Act 2003 coming into force 01/04/06.(s36(1)-(2) in force at 1.4.2006 by S.I. 2005/2714, art. 4(c); s36(3)-(6) in force at 1.4.2005 by S.I. 2005/968, art. 2(e))
- ^"Iain Coucher Chair".Ofwat.Retrieved14 March2024.
- ^"New Chairman of the Water Services Regulation Authority (Ofwat) announced".GOV.UK.Retrieved14 March2024.
- ^"David Black, Chief Executive".Ofwat.Retrieved14 March2024.
- ^"PN 03/21: Ofwat announces new interim Chief Executive".Ofwat.Retrieved14 March2024.
- ^Hassan, John (1998). A History of Water in modern England and Wales (Report). Manchester University Press. p. 176.