Government signals review of Ofwat's duties and announces new water bill

Monday, March 01, 2010

Water minister Huw Irranca-Davies has said that he is "minded to take a review of Ofwat".

Talking at the Water UK City conference, he said: "There is a genuine question around whether a system of economic regulation that was set up to extract maximum efficiencies at the time of privatisation is still the right system twenty years on. Today we are faced with challenges such as climate change and water affordability that were not on the radar in 1989."

He said the key questions were: "Should Ofwat's remit be widened to include new social and environmental challenges? Or should it be pared back to focus only on economic regulation? Or is the middle-ground approach we have now with a hierarchy of duties the right approach?"

He said that "maintaining the credibility and predictability of the regulatory regime" would be a priority, in order to protect the sector's reputation in the City.
He told the conference that the Department for Environment, Food and Rural Affairs is preparing a new Water Bill to be ready for introduction "at the next legislative opportunity". He said that this would deliver on proposals from the draft Flood and Water Management Bill that were dropped in the final bill (currently working its way through government) plus the recocommendations from the Cave review of competition and innovation and the Walker review of charging that required .

He said that he was "as confident as a minister can be" that the Flood and Water Management Bill would receive royal assent.

This story was featured on the Utility Week website.

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