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Putting water consumers first – how can we challenge monopoly companies to improve?
In a competitive market, companies have clear incentives to meet the needs of consumers on price and their levels and quality of service, so that they do not take their business elsewhere. At present, water and sewerage services in England and Wales are not subject to this kind of competition. Most consumers are served by one of 21 monopoly companies. Only large business consumers can switch supplier if they can get a better deal elsewhere.
We do not think that the absence of competition should prevent consumers from getting a good service. Since 1999 we have used the overall performance assessment (OPA) to encourage the companies to strive to improve and outperform their peers.
Recently, it has become clear that while the OPA has achieved a great deal, it has reached its limits. So, working with other stakeholders, we have developed a new approach – the service incentive mechanism (SIM). This provides an overall framework that allows the companies to develop their own solutions to meeting consumers’ expectations.
Our 'Putting water consumers first – how can we challenge monopoly companies to improve?' focus report explains the SIM and the benefits it will bring to consumers.
Download 'Putting water consumers first – how can we challenge monopoly companies to improve?'
Further information
Ofwat publications
- ‘Putting water consumers first – the service incentive mechanism’, Ofwat, March 2010
- ‘Service incentive mechanism – a consultation on moving forward from the overall performance assessment: Overview of consultation responses’, Ofwat, December 2009
- ‘Future water and sewerage charges 2010-15: Final determinations’, Ofwat, November 2009
- ‘Service and delivery – performance of the water companies in England and Wales 2008-09’, Ofwat, October 2009
- ‘Service incentive mechanism – a consultation on moving forward from the overall performance assessment’, Ofwat, August 2009
- ‘Development of consumer experience measures’, RD 04/08, Ofwat, April 2008
- ‘Ofwat’s review of the OPA and regulation of service to consumers’, PR 09/09, Ofwat, March 2008
Relevant research
- ‘Annual tracking survey 2008’, Consumer Council for Water, February 2009
- ‘Rating regulators’, Consumer Focus, February 2009
- ‘Department for Work and Pensions: Handling customer complaints’, NAO, July 2008
- ‘Domestic Retail Market Report’, Ofgem, June 2007
The Cave and Walker reviews
- ‘Consultation on the Cave review of competition and innovation in water markets’, Defra, September 2009
- ‘The independent review of charging for household water and sewerage services: Final report’, Defra, December 2009
