New inquiry to examine the work of Ofwat

• Call for evidence
• Send a written submission
• Inquiry: The work of Ofwat
• Industry and Regulators Committee

Background

The House of Lords Industry and Regulators Committee is today launching an inquiry into the Ofwat – the statutory economic regulator of the water and sewerage industry in England and Wales. The Committee will review Ofwat’s performance in meeting its objectives.

The inquiry will also consider the adequacy of Ofwat’s remit and how successfully it works with other regulators and authorities, primarily the Environment Agency and the Drinking Water Inspectorate. The Committee will conduct a short inquiry, with a small number of public evidence sessions; written submissions should therefore serve as standalone items.

Lord Hollick, Chair of the Industry and Regulators Committee, commented:

“Ofwat is a significant regulator in this country, providing oversight of a sector which provides an essential service to every household in England and Wales. Ofwat’s regulation influences the quality of service customers receive and the bills they pay for their water. It is also an important part of ensuring the quality of the UK’s water environment, both in examining water companies’ current commitments and in ensuring long-term investment in water infrastructure. In particular, it has an important balance to strike between keeping bills down, especially in the current environment, and ensuring the readiness of the UK’s water infrastructure for the future.

“The Committee is keen to examine Ofwat’s performance against its objectives, whether it has the correct powers and strategic direction, and how to measure its performance. The Committee will also consider pressing issues within Ofwat’s remit, including sewage overflows and financial returns in the water industry.”

Questions

The Committee’s call for evidence asks the following questions:

1. Is Ofwat meeting its statutory objectives?
2. Are Ofwat’s statutory objectives clear and consistent? How can performance against these be measured? How well does Ofwat manage any trade-offs between its objectives?
3. Does Ofwat have the necessary powers to meet its objectives? Does it need greater powers to ensure that water companies reduce sewage overflows?
4. Does Ofwat have the necessary resources to meet its objectives?
5. What are the main challenges facing Ofwat and how well is it meeting them?
6. Does Ofwat receive sufficient strategic guidance from the Government on how to balance its objectives?
7. How well does Ofwat work with other regulators and authorities to meet joint challenges and overlapping responsibilities?
8. How satisfactorily does Ofwat take the consumer interest into account?
9. Does Ofwat’s Price Review process adequately promote sufficient levels of investment in water and sewerage infrastructure?
10. In its engagement with the water industry, does Ofwat strike the right balance between being open to industry input whilst also providing robust regulatory oversight?
11. Does Ofwat sufficiently consider the long term in its regulation? Does Ofwat strike a balance between more visible, short-term issues and long-term considerations?

Timeline

The Committee invites written contributions to its inquiry by Friday 24 June 2022.

Further information

• About Parliament: Select committee
• Visiting Parliament: Watch committees