Source · Select Committees · Public Accounts Committee
Recommendation 1
1
Accepted
Committee examined evidence from key regulators and stakeholders on the water sector.
Conclusion
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Environment, Food and Rural Affairs (Defra), the Environment Agency (the EA) and the Water Services Regulation Authority (Ofwat) on regulating the water sector.1 We also took evidence from the Chief Executive of Water UK, David Henderson; the Chief Executive of the Consumer Council for Water, Dr Mike Keil; and John Earwaker, Director of First Economics.
Government Response Summary
The government states there will be a quadrupling of investment in the water sector. Ofwat has established Price Control Deliverables to ensure companies deliver improvements and will track progress and publish a review next year. Ofwat will also engage with companies over the next six months to improve communication with customers about bill increases and infrastructure improvements.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. improvements for customers and the environment through a quadrupling of investment for the water sector over the next five years. To protect customers from companies failing to deliver these improvements or deliver them late, Ofwat set out "Price Control Deliverables" (PCDs). PCDs set out outputs that companies are expected to deliver in terms of infrastructure delivery. Where water companies fail to deliver these outputs, they will return funding to customers. Ofwat will track the progress companies make towards PCD output targets through delivery plans and companies will report against these plans on a six-monthly basis. Companies are also required to include a short summary describing their plan and the progress against it in a language and format that is accessible to customers and clearly available on the company’s website. This summary should describe what is being delivered and the progress the company is making towards delivering the programme and be regularly updated. Working with its partner regulators Ofwat is also working to improve the transparency of the progress companies are making towards delivery of their PR24 enhancement programmes. It will publish its review of delivery plan progress next year. Ofwat agrees that companies should take further proactive action to communicate to customers what bill increases are delivering. It will engage with companies over the next six months on their plans to explain to customers within their 2026 bills, why bills are rising and what improvements in infrastructure the funding will deliver.