Ofwat offers recommendations to free up strategic infrastructure competition

Ofwat has recommended a series of legislative changes to free up competition in the provision of strategic water infrastructure, in response to the January 2022 request from business secretary, Kwasi Kwarteng.

In a “high-level stocktake,” Ofwat reported competition in strategic water investments had lowered costs, increased speed and effectiveness, and delivered wider benefits including environmental improvements and innovation.

However, it pointed to key barriers obstructing further competition: legislative restrictions to using the Specified Infrastructure Project Regulations (SIPR) regime more widely; limitations on its ability to regulate and enforce against third parties providing water treatment services; and inability for water companies to automatically apply for a development consent order under the 2008 Planning Act.

Consequently it has recommended:

• removal of the scale and complexity test from the Water Industry Act (WIA) 1991 and SIPR;

• amendment of the WIA 1991 to make provision similar to that made in respect of licensed retailers at market opening; and

• review and update the definition of water Nationally Significant Infrastructure Projects in the 2008 Planning Act.