Licence conditions get a clean up

Water companies started the New Year with clearer licences after they all signed up to amendments sought by Ofwat to set out licence obligations in clearer, more accessible language.

Regulator and industry have collaborated over the past year to identify and agree areas where licences can be simplified and streamlined, including removing conditions which are no longer relevant or don’t reflect the current environment. Ofwat explained the changes were intended to:

· ensure companies understand what is expected of them;

· make it easier for Ofwat to determine whether companies are complying with their obligations; and

· allow stakeholders to more easily understand what it is that Ofwat holds companies to account for.

The licence changes for most conditions came into effect on 1 January 2019, with Conditions F and N coming into effect on 1 March 2019.

The exercise is distinct from proposals on licence changes related to Ofwat’s Board Leadership, Transparency and Governance Principles, and on bringing all companies’ licences up to the current best standard of ring-fencing, on which the regulator has also recently consulted.