Regulators can't prove they give value for money says spending watchdog
Ofwat, along with other sector regulators, Ofgem, Ofcom and the Financial Conduct Authority, are currently unable to prove they offer value for money according to the public spending watchdog, the National Audit Office.
In a report on its assessment of the regulators’ measurement of their protection of consumer interests – their shared statutory responsibility – the NAO said: “Regulators are all taking steps to improve how they define, measure and report their performance in protecting consumers, but all have further to go to do so in a meaningful way." It went on:
"Until they achieve this, they will not be able to give consumers confidence that they are providing value for money, or adequate overall levels of protection for those who need it.”
And while acknowledging that the four regulators were working on improving their assessments of their performances they “have further to go to be able to do so robustly,” said the NAO.
It went on to say that all four regulators:
“have not been specific enough in defining the overall outcomes they want to achieve for consumers”;
“find it difficult to manage the trade-offs they face between competing objectives in protecting consumers”; and
“monitor data on consumers’ experiences and outcomes, but do not routinely use this information to assess their own performance.”
And the NAO warned that none of the four “had yet developed a good overall understanding of its influence over consumer outcomes and how to exert this through different regulatory approaches.” Other conclusions from the spending watchdog included: “Regulators’ public reporting does not provide a meaningful overall assessment of how well they are protecting consumers’ interests,” and “Regulators find it challenging to articulate what difference they are making to the performance of each sector.”
The NAO asserted that greater clarity in reporting from the regulators would come from a common set of standards “for what or how to report” but “regulators have not developed equivalent standards or principles with which to drive improvements to their reporting.”
Among its recommendations the NAO said the regulators needed to “Do more to translate their high-level intended consumer outcomes into what this means in practical terms,” and “Work together,to develop a consistent approach to modelling and measuring regulatory influence and impact.”