IB 01/16 Ofwat sets out plans for review of household water competition

Ofwat has today published its draft terms of reference for reviewing the costs and benefits of providing competition for retail water services to household customers in England.

In November, Ofwat welcomed the Government’s decision to look into the benefits of such competition. The Government asked Ofwat to carry out the review, reporting back in the summer.

Cathryn Ross, Ofwat Chief Executive said:

“At Ofwat we take very seriously our duty to protect customers and ensure they get the best possible deal. That’s why we welcomed the UK Government’s decision to explore whether water services to households in England could and should be opened to competition.

“Business customers and other organisations will be able to choose their retail supplier from April next year. There are eighteen times as many household customers in England who could also potentially benefit from a well-functioning market. Yet we also need to identify the barriers to getting a better deal for customers and making sure all customers’ interests are considered.

“Opening up choice is a decision for government. We have committed to a rigorous review that is open, transparent and evidence based. We will look to learn from other sectors and want to hear a wide range of views. This will be crucial in delivering a comprehensive review that takes full account of the best interests of customers and wider society.”

Given the constrained timeline Ofwat will also publish its final terms of reference, as well an early call for evidence, by the end of the month. A period of engagement with stakeholders will follow to understand the evidence submitted and issues raised.

Ofwat will then publish its initial findings in July 2016, with the final report submitted to Government in September 2016. Once the review is complete, it will then be for the Government to decide if and when it wants to give household customers a choice.

Notes for Editors

  1. The Water Services Regulation Authority (Ofwat) is the economic regulator of water and sewerage companies in England and Wales. Its role is to help the sector build trust and confidence with customers and wider society. It exercises its powers in a way that it judges will protect the interests of consumers, promote value and safeguard future resilient water and sewerage services by allowing efficient companies to carry out their functions properly, and finance them.
  2. Retail services include customer facing activities, such as billing, account handling and customer queries, as well as water efficiency advice. They are different to wholesale services, which include the pipes and treatment works required to supply water and take wastewater away. 1.2 million non-household customers are set to be able to choose their retail supplier from April 2017.
  3. Media enquiries to Ofwat Press Office on: Benedict Fisher 0121 644 7642 / benedict.fisher@ofwat.gsi.gov.uk