Who Is Ofwat? The UK Water Regulator Explained
Ofwat is the UK water regulator responsible for overseeing the 32 private water companies that manage both clean water and sewerage treatment. Here we’ve created a guide to fully explain Ofwat’s role in the water industry.
Who Is Ofwat?
Ofwat (also known as the Water Services Regulation Authority) is one of the three regulators of the UK’s water industry, and its responsibility is the economic regulation of the water companies to ensure fair pricing and to protect consumer interests.
Careful if you are in Scotland or Northern Ireland! Ofwat only regulates the water industry in England and Wales. In Scotland and Northern Ireland, the industry has remained in public hands and is regulated by separate bodies.
|Ofwat||Ensures fair pricing and promoting the financial stability of water companies|
|Drinking Water Inspectorate||Regulates the quality of drinking water|
|Environment Agency||Manages flood risk and environment pollution.|
Is Ofwat Independent?
Ofwat is an independent government department that has its own autonomy and is not accountable to a government minister. Ofwat is accountable to parliament and therefore must carry out the tasks appointed to it by the Water Act 1991.
However, as an independent body, this means that it can carry out its duties as it sees fit, and it has the liberty to structure itself as it wishes. This also means that its day-to-day administration is not answerable to the government of the day.
Who Does Ofwat Report To?
Despite being an independent body, Ofwat does issue an annual report for the public and is considered a sub-department of the Department for the Environment, Food and Rural Affairs.
Who Is CEO of Ofwat? The current chairman of Ofwat is Jonson Cox who has chaired Ofwat since 2017. David Black is currently the interim CEO.
Why Was Ofwat Created?
Since the water companies do not offer their services in a competitive market, there is a risk that these companies will not provide the service to the standard that customers should expect. Due to this regional monopoly, Ofwat needs to regulate the market to safeguard customers from unfair price hikes.
How Is Ofwat Funded?
Ofwat is funded through recovering license fees from the water companies who require the license in order to operate the water supply and wastewater treatment in a certain region. Ofwat’s accounts are also provided to the Treasury, the National Audit Office, and the Public Accounts Committee.
How Does Ofwat Regulate Water?
Ofwat regulates the water market through a variety of different measures to ensure the price and financial stability of the overall industry. This includes price reviews, licenses, market overviews and cooperation with other regulators.
The water companies are the ones who bill for your clean drinking water and your wastewater management. They also are responsible for installing a water meter in your property.
Ofwat conducts price reviews every five years in order to assess the challenges and set the targets for the water and sewerage companies in the UK.
The main aim of the price reviews is to set the price that water companies can charge its customers. It needs to make sure that this price is both beneficial for customers, and also financially sustainable for water companies.
The latest price review to take place was in 2019. This was known as the PR19 and its key findings have set the pace for the water industry’s future.
- Increasing resilience through infrastructure - to protect regions against flooding and droughts.
- Protecting the environment - laying out plans to achieve net zero carbon emissions by 2050
- Improving customer service - improving communication regarding problems and complaints.
- Making bills more affordable - maintaining the price controls to keep water bills low.
These price reviews help keep your water rates manageable. The next review will take place in 2024.
What does ODI mean? Ofwat ODI stands for “outcome delivery incentive” which are usually financial rewards or penalty on water companies who either succeed or fail to hit service targets.
Ofwat imposes licenses on both the wholesale and retail water markets to maintain the quality standards and practices for the industry. Those who want to become a water company need to apply for a license and be assessed by Ofwat to make sure they are financially and logistically capable of running a water company. The price per application of a license is £5,250.
Although water companies can set their own prices, they must follow a charging scheme provided by Ofwat that details the rules and regulations over how much they may charge for a service. These prevent water companies from charging what they like for the water and sewerage services.
These charging schemes give you an idea of how your water bill is calculated, and often provide the average bill that a water company will charge you. Check out our guide to find out more about the average UK water bill.
What is RAPID? RAPID is the Regulatory Alliance for Progressing Infrastructure Development. This was set up in 2019 with the price review, combining the efforts of Ofwat, the Drinking Water Inspectorate, and the Environment Agency. It will be responsible for regulation gaps and barriers for building better infrastructure.
What Is The Ofwat Innovation Fund?
The Ofwat Innovation Fund was set up as a competition between water companies to win a share of £200 million worth of investment to get the water sector ready for the future. There are two types of entry for the competition, the Catalyst Stream for lower cost plans, and the Transform Stream requiring more money.
How Do I Complain To Ofwat?
Ofwat does not deal with complaints against individual water suppliers. Neither does it deal with problems regarding bills or payments to a water supplier. To make a complaint of that nature, you should contact your water supplier directly in order to settle the matter.
If you are unsatisfied with the way your water supplier has handled your complaint, the next step is to contact the Consumer Council for Water who can be reached on 0300 034 2222.
Ofwat only deals with complaints that are related to the water market, for instance, anti-competitive behaviour. Ofwat may handle complaints concerning new water connections as well.
For contact information of your water supplier, check our water supplier guides.
Ofwat Contact Number
If you want to get in contact with Ofwat about something not related to a complaint, you can ring them on the Ofwat contact number 07595 087 465. Ofwat also provides a contact form on their website where you can fully describe the issue you are having.