Ofwat has today published a consultation document, outlining proposed changes in the way it approaches regulatory compliance, shifting responsibility and accountability towards water and sewerage companies (WaSCs).
The 57-page document details two significant shifts in the regulator’s approach going forward which Ofwat describes as “fundamental to the delivery of our strategy – sustainable water”. Both, Ofwat stresses, are in line with the recommendations of both the Defra review published in July and consumer representation in the water sector, the Gray review.
The first would see devolution of regulatory responsibility, whereby Ofwat will regulate based on results rather than process. WaSCs will be responsible for putting in place their own systems processes and will be held accountable according to pre-determined standards. The aim is to make WaSC accountable to their customers rather than the regulator.
“We want a new approach where companies are responsible for managing their risks and our role is to hold them to account for their delivery to their customers,” says the report.
The second significant change is that Ofwat is proposing to instigate a “risk-based framework” – essentially a prioritisation system. Under the new framework it will closely manage its own resources, acting only where the greatest risks are posed or the greatest benefits can be realised. Under the proposals each action will also need to be signed off at senior level within Ofwat.
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