The report on Ofwat from the Guardian article.
"Report criticises Ofwat's 'desk-based' approach to regulation
Sir Jon Cunliffe’s report contains some specific criticism of how Ofwat has regulated the water industry.
The Commission says Ofwat “relied too heavily on a datadriven, econometric approach”. That means the regulator failed to take sufficient account of company-specific conditions and challenges.
The “over-reliance” on industry-wide benchmarking has led to “sub-optimal outcomes for the sector, for customers, for investors and for the environment”, the report finds.
It adds:
The increasing complexity of the challenges facing water companies – and of the challenges facing the regulator in regulating private monopoly utilities – require a broader, less monolithic and a less desk-based approach to economic regulation and to the oversight of companies’ performance against their licences.
Also, Ofwat’s approach failed to provide sufficient oversight of water companies’ delivery of infrastructure, management of their finances, or the health of the sector’s infrastructure, the Commission concludes.
But, it adds, the blame lies in Westminster too! The report says:
The Commission recognises that, until more recently, Ofwat was encouraged by the government to scale back its oversight of the sector, that it has paid closer attention to these issues in recent years".