Ofwat: the next three years

Prices, competition and customer service top water watchdog’s agenda

UK water industry watchdog Ofwat has set out its stall for the next three years in a strategic report and promised to publish new price limits in November 2009.

Ofwat will also publish draft decisions on price limits for 2010-15 for consultation with suppliers and revise water efficiency targets for 2010-15, drawing on companies’ experience of operating to voluntary targets.

Ofwat’s Strategy: Taking a Forward Look, reiterates the organisation’s key commitments to protecting consumers and keeping water companies in line, although it looks forward to a time when increased competition will do much of the heavy lifting in the latter category.

“As markets are opened, we will look for opportunities to withdraw regulation where competitive pressures provide sufficient protection for consumers,” says the report. “But until this happens, or where competition cannot provide this protection, we will continue to challenge robustly monopoly service providers to deliver the services their consumers expect.”

Given increasing complaints from consumers about water suppliers’ customer service levels, it is no surprise that the report focuses on this area. During 2008-2009, Ofwat will pilot new consumer experience measures and research new consumer service incentives.

The report also signals Ofwat’s intent to hike its 2008-2009 budget from £13.7m to £17.9m, of which £0.52m relates to work on the Thames Tideway scheme. More litigation against water suppliers has also meant the budget needs to be increased, says the report.

A new Ofwat website is also on the cards for the next 12 months.