Ofwat's review of market competition in the water and sewerage industries in England and Wales

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Ofwat home > Ofwat key work areas > Competition

Ofwat's review of market competition in the water
and sewerage industries in England and Wales

Competition has the potential to empower customers, as well as drive efficiency and innovation over the long term. We are committed to introducing competition into the water and sewerage industries where this will be beneficial to consumers. As markets are opened, we will look for opportunities to withdraw regulation where competitive pressures provide sufficient protection for consumers.

We consider that effective competition has the potential to generate benefits in a range of water and sewerage services.

It is a key driver of efficiency and innovation, both of which will be crucial in enabling the water and sewerage industries meet the challenges of the future.
It has an important contribution to make in delivering the Government's vision, as set out in its water strategy, 'Future water', for sustainable delivery of secure water supplies and an improved and protected water environment.
It has delivered substantial benefits in other utility sectors, leading to lower costs, improved service, and more choice for customers.
Regulation can be gradually withdrawn as markets become progressively competitive.

Publications to date

To date, we have issued four papers as part of our review of competition, in April, July and December 2007 and spring 2008.

In April 2007, we published our outcomes paper which set out the findings of our internal review of competition in the water industry. This paper detailed our initial findings and highlighted the need for further work.

We published the first of a series of consultation papers in July 2007, to start a wider debate on the options for promoting the development of effective market competition in the water and sewerage industries. The "Consultation on market competition in the water and sewerage industries in England and Wales" considered two areas:

options for developing the existing 'Water Supply Licensing' regime; and
potential for more substantial changes to the existing industry structure and regulatory regime, for example the introduction of household competition and separation of water companies' activities.

In December we published the first of a two-part consultation on the recommendations from our competition review. "Market competition in the water and sewerage industries in England and Wales - Part one: Water Supply Licensing" set out our recommendations for changes to the existing Water Supply Licensing (WSL) regime.

"Ofwat's review of competition in the water and sewerage industries: Part II" sets out our recommendations for wider reform of the competition framework in the water and sewerage industries, looking beyond the assumptions of the WSL regime. This is also a contribution to the Government-commissioned independent review of competition, led by Professor Martin Cave, which will report by spring 2009.

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