Ofwat is to be scrapped as part of a radical overhaul of a “broken” water regulatory system, Environment Secretary Steve Reed confirmed today.
He said the regulator established at privatisation in 1989 to set limits on household bill rises will be abolished as part of the “biggest overhaul of water regulation in a generation”.
He said: “Today I can announce that the Labour Government will abolish Ofwat.”
He added: “In the biggest overhaul of water regulation in a generation, we will bring water functions from four different regulators into one,” he said.
He said the new single regulator would be “powerful” and “responsible for the entire water sector”, with a clear mandate to “stand firmly on the side of customers, investors and the environment”.
“It will prevent the abuses of the past,” he said.
“For customers, it will oversee investment and maintenance so hardworking British families are never again hit by the shocking bill hikes we saw last year.”
Here are some of the key findings from the report:
What was the report?
The publication was a much-anticipated final report from the Independent Water Commission, led by former Bank of England deputy governor Sir Jon Cunliffe, and outlined 88 recommendations to the UK and Welsh governments to turn around the ailing industry.
The report, published on Monday morning, recommended abolishing the Ofwat, officially known as the Water Services Regulation Authority, as well as the Drinking Water Inspectorate (DWI), which ensures the quality of public water supplies.
What key recommendations were made?
Five of the key findings were:
One integrated water regulator
One change suggested is to have just a single water regulator in England and a single water regulator in Wales. In England, this would replace Ofwat, the current Drinking Water Inspectorate and water-environment related functions from the Environment Agency and Natural England. In Wales, Ofwat's economic responsibilities would be integrated into Natural Resources Wales.
It is hoped this will paint a clearer picture as well as “improve customer confidence” in the sector.
New planning authorities
It is suggested to bring in eight new regional water system planning authorities in England and one national authority in Wales.
These groups would be made up of representatives of local councils, public health officials, environmental advocates, agricultural voices and consumers, and will be responsible for water investment plans reflecting local priorities and streamlining the planning processes.
Compulsory water meters
It is said there should be stronger environmental regulation than what is in place at present, and this will include compulsory water meters.
Under the environmental impacts it is also suggested there should be changes to wholesale tariffs for industrial users and greater water reuse and rainwater harvesting schemes put in place.
Better consumer protection and support
Under plans there will be an upgraded consumer body Consumer Council for Water, moving into an Ombudsman for Water which would give stronger protection to customers and a clearer route to resolving complaints. Advocacy duties are to be transferred to Citizens Advice.
A long term plan
The report stated there needs to be a clear strategic direction - and a long-term, 25-year national water strategy should be published by the UK and Welsh governments, with ministerial priorities given to water firms every five years.
