Implementation of the new regulatory arrangements in the Water Act 2003
This page brings together information on the new regulatory arrangements implemented as a result of the Water Act 2003.
The new regulatory arrangements are contained in sections 34 to 56 of the Water Act 2003. These sections reflect a number of objectives, principally set out in the Government's July 1998 white paper: A Fair Deal for Consumers - Modernising the Framework for Utility Regulation.
The primary functions of the new regulatory arrangements sections created a new regulatory authority for the industry, the Water Services Regulatory Authority (WSRA), and set up a new, independent Consumer Council For Water (CCW) and extended opportunities for competition in the water industry.
Ofwat
OFWAT –the Office of Water Services
Section 34 of the Act established a new corporate body to be known as the Water Services Regulation Authority. The Office of the Director General of Water Services (Ofwat) was abolished. The new Authority is still publicly known as Ofwat.
The new Authority was set up on 1 April 2006.
Under Section 52 of the Water Act 2003 there is a duty of co-operation between water regulators (the Secretary of State, Welsh Ministers, Ofwat, and the Environment Agency) to make arrangements for promoting:
- co-operation and the exchange of information between them, and
- consistency of treatment of matters which affect them both.
There is in a similar duty on CCWater to make agreements with the Secretary of State, Welsh ministers and Ofwat. Once agreements have been made they must be put into memoranda of understanding (MoUs).
So far the following MoUs have been signed and laid before Parliament:
- Ofwat with CCWater (pdf, 20 KB)
- Ofwat with the Environment Agency (pdf, 20 KB)
The Consumer Council for Water
Section 35 abolished the existing customer services committees which were set up under section 28 of the Water Industry Act 1991 and replaced them with a new independent Consumer Council for Water. The Council is a Non-Departmental Public Body, sponsored by Defra, which will set its budget and monitor its expenditure.
PriceWaterhouseCoopers were commissioned to conduct a study into the structure of the new Council.
- The organisational and regional structure of the Consumer Council for Water - January 2004 (pdf, 950 KB)
An Implementation Steering Group made up of representatives of Defra, WaterVoice, Ofwat and the Welsh Assembly Government led the work of creating the Council.
Dame Yve Buckland was appointed Chair of the Consumer Council for Water. The Chair recruited a Chief Executive, Tony Smith for the Council.
the start date for functions of the CCW was 1 October 2005.
Competition in the water industry
In July 2002, the Government consulted on proposals to create new opportunities for competition in water supply to large commercial and industrial users. These proposals were included in the Water Act 2003 and came into force on 1 December 2005 for customers that use 50 megalitres or more of water.
Implementation of the water supply licensing regime is being taken forward by Ofwat. For further information, see:
Other new regulatory arrangements
Section 48 of the Water Act 2003 provides enforcement authorities (the Secretary of State, the National Assembly for Wales and Ofwat) with powers to impose civil financial penalties on statutory undertakers and licensed water suppliers for certain breaches and contraventions.
A revised statement of policy along with the principles of the definition of turnover order were consulted on by Defra, the National Assembly for Wales and Ofwat in December 2004.
Following the consultation a joint statement of policy (pdf, 30 KB) on how the penalties are to be applied has been agreed between Defra, the National Assembly for Wales and Ofwat.
The Order to define turnover was laid to come into force on 1 April 2005, and is available on the HMSO legislation website.
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Page last modified:
11 September 2007
Page published: 29 April 2004