Who Are Ofwat?
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Business owners are likely to have come across names such as Ofwat and Ofgem at some point in their business utility dealings.
Whilst Ofgem plays a key role in the regulation of the UK energy market, Ofwat has a fundamental influence over the UK’s water services.
In this guide, we’ll provide you with everything you need to know about Ofwat; including who they are, what they do and how they impact your business.
Ofwat is the Water Services Regulation Authority in the UK. It is a non-ministerial government body that is responsible for the economic regulation of the privatised water and sewerage sectors throughout England and Wales.
Ofwat’s main purpose is to ensure that the water and wastewater companies that they regulate consistently meet the requirements of their licence and provide customers with effective and efficient service at an affordable and fair price.
Ofwat was formed in 1989 after the launch of the Water Act (1989), which made the then ten public water authorities private, creating 10 regional water companies. Ofwat’s powers and responsibilities are dictated by the Water Industry Act 1991.
Prior to 2006, Ofwat served as support for the Director General of Water Services. However, on April 1st 2006, the regulator took over all regulatory powers for the UK water and wastewater services.
As a regulating body, Ofwat has a number of roles and responsibilities within the UK water market. These include:
As the regulator for UK water services, Ofwat holds a significant amount of power and authority within the industry. This includes the authority to deal with and resolve complaints, disputes and company failures.
Ofwat conduct investigations into any water or wastewater company that appears to be breaching the terms of their licence. If a breach is found, Ofwat will deal with the issue accordingly. Sanctions can include anything from informal warnings to enforcement orders and financial penalties.
Ofwat has statutory enforcement powers under the Water Industry Act 1991. They also possess powers under the Competition Act 1998 and Articles 81 and 82 of the EC treaty.
Ofwat will intervene on an issue within the market where it is best placed to do so, and all of their investigations and enforcements are based on evidence.
Examples of penalties issued by Ofwat include its 2019 imposing of a £126 million penalty on Southern Water for their sewage treatment failure and their apparent deliberate misreporting of performance. Southern Water also received another fine of £90 million in July 2021 for unpermitted sewerage discharges.
Here are some of the markets that Ofwat regulate:
Ofwat is funded by the licence fees paid by its regulated companies. Ofwat is accountable to Parliament for the money they spend. They may also be required to provide their financial information to the Treasury, the National Audit Office and the Public Accounts Committee.
At Business Energy, all of the water suppliers we work with are fully licensed and regulated by Ofwat. You can therefore have peace of mind that we’ll be able to provide you with an excellent deal for your business water.
Try our free online quote tool today to find the cheapest deal available for your business water supply.