Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Acknowledged
Ofwat's asset health measurement relies on retrospective data, impeding proactive maintenance.
Conclusion
Ofwat told us that it is challenging to understand asset health for a sector where so many of the assets are below ground and can only be measured indirectly.24 Ofwat illustrated this problem when it told us about the challenge of making sure companies replace mains which are in a poor condition.25 But Ofwat currently uses retrospective measures which record asset failure – such as sewer collapses and mains repairs. External commentators, including the Competition and Markets Authority, and the National Infrastructure Commission, have called for more forward- looking measures.26 Ofwat is still working on getting standards in place 17 C&AG’s Report, Figures 3-6 18 Q 8 19 C&AG’s Report, para 1.8 20 Q 23 21 Q 61 22 C&AG Report, paras 2.45, 2.47-2.48 23 Q 42 24 Q 37 25 Q 41 26 C&AG’s Report, para 2.46 11 to consistently understand asset health, and told us that it will still take 2-3 years to get the right information for companies to be able to make the case for funding.27It should be possible to collate this information in a shorter timescale.
Government Response Summary
The government notes Ofwat's powers to require companies to develop and implement long-term asset management plans and take enforcement action against companies that fail to maintain their assets properly, and that Ofwat has recently consulted on proposals to strengthen its powers to require companies to invest in asset maintenance and improvement.
Government Response
Acknowledged
HM Government
Acknowledged
Ofwat’s powers include requiring companies to develop and implement long-term asset management plans and taking enforcement action against companies that fail to maintain their assets properly. Ofwat also uses a range of measures to assess asset health, including retrospective measures such as sewer collapses and mains repairs. Ofwat has recently consulted on proposals to strengthen its powers to require companies to invest in asset maintenance and improvement.