Press statement: Potential abolition of Ofwat

Statement following a Guardian article suggesting Ofwat, the water regulator, will be abolished after a consultation into its future

The problem for government is clear: economic and environmental regulation of the water industry has been very muddled since privatisation and is the root cause of many of the issues with the sector. Greater clarity, consistency, certainty and accountability of regulation is urgently needed for water companies to improve their performance and to attract investment. They therefore face a choice between reforming the current regulatory framework to make it work better, or creation of a new, single regulator.

Reform may not achieve the desired objectives because public bodies are slow to change, whereas the creation of a brand-new regulator could be so disruptive and long-winded a process that the opportunity for rapid change is missed.

Whichever solution the government chooses, the water industry must have a regulator with the necessary resources and powers to ensure that the environment and our drinking water are protected and safe, and that everyone in the sector is clear about the expectations on the industry.

Mark Lloyd, Chief Executive