Ofwat to get Ofgem-style powers to amend licences

DEFRA has confirmed it will override objections from most water companies and give Ofwat Ofgem-style powers to modify licences.

In its response last week to responses to its January 2019 consultation Improving our management of water in the environment, the government said it will modernise the licence amendment process in water based on the energy model – “however we will take account of the needs of the water sector, and comments provided in consultation responses”. It explained: “The government believes that we have delayed change and modernisation for too long… The status quo means that the regulator is potentially constrained from making modifications that it considers necessary, without making a reference to the Competition and Markets Authority: this is not a regulatory model that we believe should continue.”

DEFRA commented: “We acknowledge the water sector’s concern about regulatory stability and the importance of continued investability in the sector. We are of course keen to maintain and increase that investment and will take account of the requests for safeguards around a modernised process that some investors supportive of the case made in their responses.”

Elsewhere in the response document, DEFRA confirmed it would take forward most of the measures it consulted on in January. Key topics dealt with included water resources and drainage planning; abstraction licensing; and flooding.

The publication was one of six consultation response documents published by DEFRA last week as part of an update to progress on its landmark Environment Bill. Michael Gove issued a thorough policy statement on this as his last major act as environment secretary.