Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Ofwat considers separating water regulation

Water regulator Ofwat is considering whether to separate and stagger the regulation of water and wastewater services.

Supply chain trade body British Water presented the idea to Ofwat earlier this month, and said the idea would flatten out the peaks and troughs in capital spending.

Ofwat received the idea positively, said British Water director Paul Mullord. “They were keen to look at it further,” he said.

British Water said that separating and staggering water and wastewater price reviews would significantly level out the spending highs and lows caused by the water companies’ five year Asset Management Plans (AMPs). AMP spending is determined by five yearly price reviews conducted by Ofwat.

Ofwat has resisted proposals for staggered price reviews on the grounds that they would make it harder to compare the performance of water companies.

Mullord said separating water and wastewater would remove that problem.

“The idea is not new but little has changed in the 20 years since privatisation,” he said. The two services are presented separately in Ofwat’s financial performance and expenditure (FPE) reports, so it would not be difficult to separate their regulation, he said.

Built asset consultancy EC Harris partner Greg Bradley said the idea could be successful, but fails to address the fact that Ofwat’s one-size-fits-all approach to regulation creates inefficiencies.

He said it would be better to have a system where AMP periods for individual water companies are lengthened or shortened depending on their performance. This would mean that those performing badly are more heavily regulated, and those doing well are subjected to fewer price reviews.

Readers' comments (1)

  • RFP

    Separation and staggering is a very good idea. It will go some way to avoiding the situation we have now where experienced staff are lost through redundancy at towards the end of AMP periods because of a spending drought.

    As for tailoring the length of AMP periods in accordance with performance in theory this is a good idea but in practice the so called more efficient water companies will have more slack to use OFFWAT funding to input into the ifrastructure later rather than sooner!

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Please note comments made online may also be published in the print edition of New Civil Engineer. Links may be included in your comments but HTML is not permitted.