Water Services Regulation Authority
Encyclopedia
The Water Services Regulation Authority (Ofwat) is the body responsible for economic regulation of the privatised water
and sewerage industry in England and Wales
.
Ofwat is primarily responsible 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. The most recent review was carried out in 2009; reviews are carried out every five years, and thus the next will take place in 2014.
Ofwat consists of a board, plus an office of staff which carries out work delegated to them by the board. The current board consists of:
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.
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 Byatt was the Director General between 1989 and 2000; Philip Fletcher, the current chairman, was Director General until 2006.
On 1 April 2006, the Director General was replaced by the Water Services Regulation Authority. The name "Office of Water Services" is no longer used, as it had no legal basis.
Water
Water is a chemical substance with the chemical formula H2O. A water molecule contains one oxygen and two hydrogen atoms connected by covalent bonds. Water is a liquid at ambient conditions, but it often co-exists on Earth with its solid state, ice, and gaseous state . Water also exists in a...
and sewerage industry in England and Wales
Wales
Wales is a country that is part of the United Kingdom and the island of Great Britain, bordered by England to its east and the Atlantic Ocean and Irish Sea to its west. It has a population of three million, and a total area of 20,779 km²...
.
Ofwat is primarily responsible 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. The most recent review was carried out in 2009; reviews are carried out every five years, and thus the next will take place in 2014.
Ofwat consists of a board, plus an office of staff which carries out work delegated to them by the board. The current board consists of:
- Philip Fletcher - Chairman
- Regina Finn - Chief Executive
- Penny Boys - Non-Executive Director
- Peter Bucks - Non-Executive Director
- Jane May - Non-Executive Director
- Michael Brooker (WSRA) - Non-Executive Director
- Gillian Owen (WSRA) - Non-Executive Director
- Keith Mason (WSRA) - Executive Director
- Cathryn Ross - Executive Director
The Environment Agency
Environment Agency
The Environment Agency is a British non-departmental public body of the Department for Environment, Food and Rural Affairs and an Assembly Government Sponsored Body of the Welsh Assembly Government that serves England and Wales.-Purpose:...
is responsible for environmental regulation, and the Drinking Water Inspectorate
Drinking Water Inspectorate
The Drinking Water Inspectorate is a section of Department for Environment, Food and Rural Affairs set up to regulate the public water supply companies in England and Wales....
for regulating drinking water quality.
The water industry regulator in Scotland
Scotland
Scotland is a country that is part of the United Kingdom. Occupying the northern third of the island of Great Britain, it shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the...
is the Water Industry Commission for Scotland.
History
Ofwat was set up in 1989 at the time when the 10 Water Authorities in England and Wales were privatised by flotation on the stock market. The resulting companies are known as "the 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 nineteenth 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 Byatt was the Director General between 1989 and 2000; Philip Fletcher, the current chairman, was Director General until 2006.
On 1 April 2006, the Director General was replaced by the Water Services Regulation Authority. The name "Office of Water Services" is no longer used, as it had no legal basis.
Price Reviews
Every five years, OFWAT set limits on the prices which UK water companies can charge to their customers; this process is known as a Price Review. There have been four Price Reviews so far - in 1994 (PR94), 1999 (PR99), 2004 (PR04) and 2009 (PR09). The most recent, PR09, sets price limits for 2010-2015. There were four phases of PR09:- Preparation (March 2007 to March 2008)
- Setting the scene (April 2008 to January 2009)
- Decisions and determinations (February 2009 to November 2009) - the final determinations were published in November 2009
- Implementation and evaluation (December 2009 to September 2010) - by 26 January 2010, water companies decided whether to accept OFWAT's proposals or refer them to the Competition CommissionCompetition CommissionThe Competition Commission is a non-departmental public body responsible for investigating mergers, markets and other enquiries related to regulated industries under competition law in the United Kingdom...
. Only Bristol Water rejected Ofwat's price determination and referred the decision to the commission.
See also
- List of United Kingdom water companies
- Water supply and sanitation in England and WalesWater supply and sanitation in England and WalesPublic water supply and sanitation in the England and Wales has been characterized by universal access and generally good service quality. Salient features of the sector in the United Kingdom compared to other developed countries is the full privatization of service provision and the pioneering of...