Gray review of Ofwat

Photo source: Defra

The announcement that Defra has appointed David Gray to review whether Ofwat is continuing to offer value for money should be welcomed.

Its clear given the monopolistic structure of the water industry that some form of regulation is essential and Ofwat has certainly played an essential role in the transformation of the water industry since privatisation. But is it really necessary to have almost identical separate regulators in Scotland and Northern Ireland or is this dictated by national politics?

There is overlap between the functions of Ofgem and Ofwat and many would argue that Ofwat is getting excessively complicated. There is a question over whether Ofwat, with its insistence on a five year regulatory cycle’ is neglecting the damage being done to the supplier base by the peaks and troughs in workload. The chance to stand back and review whether Ofwat could be more efficient is absolutely essential otherwise quangos just keep growing to satisfy their own agendas.