|Non-ministerial government department overview|
|Formed||1 April 2006|
|Preceding Non-ministerial government department||
|Jurisdiction||England and Wales|
|Headquarters||Centre City Tower, 7 Hill Street, Birmingham, B5 4UA|
|Annual budget||£19.1 million (2011-2012) |
|Non-ministerial government department executive||
Ofwat is primarily responsible for setting limits on the prices charged for water and sewerage services, taking into account proposed capital investment schemes (such as building new wastewater treatment works) and expected operational efficiency gains. The most recent review was carried out in 2014; reviews are carried out every five years, and thus the next will take place in 2019.
Ofwat consists of a board, plus an office of staff which carries out work delegated to them by the board.
Ofwat was set up in 1989 at the time when the 10 Water Authorities in England and Wales were privatised by flotation on the stock market. The resulting companies are known as "the water and sewerage companies"; this distinguishes them from around a dozen smaller companies which only provide water services, which were already in private hands in 1989 (having remained in private ownership since their creation in the nineteenth century). The water only companies provide water to around 25% of the population in England and Wales.
Before 1 April 2006, all regulatory powers rested with the Director General of Water Services. The staff who supported the role of the Director General were collectively known as the "Office of Water Services", which was abbreviated to "Ofwat". Ian Byatt was the Director General between 1989 and 2000; Philip Fletcher, was Director General until 2006 and chairman until 2012. The current chairman is Jonson Cox, who took up his position in November 2012. The current chief executive is Rachel Fletcher, who took up her post in January 2018.
On 1 April 2006, the Director General was replaced by the Water Services Regulation Authority. The name "Office of Water Services" is no longer used, as it had no legal basis.
Every five years, OFWAT set limits on the prices which water companies in England and Wales can charge to their customers; this process is known as a Price Review. There have been five Price Reviews so far - in 1994 (PR94), 1999 (PR99), 2004 (PR04), 2009 (PR09), and 2014 (PR14). The most recent, PR14, set price limits for 2015-2020. They are set on a so-called "K factor" which determines the average value of price rises above the current rate of inflation (RPI) for the next five year asset management plan period. The rises so far set are:
|Start year||K factor|
- Ofwat Annual Report and Accounts 2011-2012 (PDF), Water Services Regulation Authority, 2012-07-19, retrieved 2013-07-09
- s36 Water Act 2003 coming into force 01/04/06. (s36(1)-(2) in force at 1.4.2006 by S.I. 2005/2714, art. 4(c); s36(3)-(6) in force at 1.4.2005 by S.I. 2005/968, art. 2(e))
- Hassan, John (1998), A History of Water in modern England and Wales, Manchester University Press, p. 176
- Price Review, Ofwat, retrieved 7 April 2012