The week after the shock resignation of chief executive Regina Finn, Utility Week can exclusively reveal that the regulator is preparing a multi-million pound invitation to tender to become a “delivery partner” for PR14.
Ofwat senior director of markets and economics Sonia Brown insisted that outsourcing peak price review work was “business as usual” and more efficient than retaining staff over the five-year period.
“Having one company as delivery partner rather than sending out little pieces now and then gives much greater assurance of continuity in this difficult period,” she said.
But experts said the move smacked of “desperation” and suggested the PR14 timetable was in danger of slipping.
One senior regulatory source said: “That sounds like a rather brutal recognition that things have been slightly mismanaged. The place is already teeming with consultants.”
Former Ofwat regulator Sir Ian Byatt said: ” is the most important job the regulator does and it has got to be something the regulator is really in charge of. You can do that by outsourcing but it depends how you do it.”
Alan Sutherland, chief executive of Wics, said: “It would surprise me that any regulator would do that.”
Ofwat shed 48 staff at a cost of £2.3 million in 2011/12. Its spending on consultants is understood to have soared to more than £5 million in 2012/13 from £3 million the previous year.
Ofwat’s records of monthly transactions over £25,000 show that Oxera Consulting and Cambridge Economic Policy Associates were key advisers on PR14 last year.