In a response to consultation, the Department for the Environment, Food and Rural Affairs (Defra) said its four principles for setting water charges, outlined above, had strong support from industry. They will form the basis for its charging guidance for Ofwat, to be laid before Parliament.
The document avoided more controversial questions. It said that setting charges for upstream markets, for example, would be a “complex matter”, adding “the government is undertaking careful work at present to think through upstream reform. Further detailed guidance on charging in upstream markets will be issued once all the different factors have been worked through with all interested parties.”
An Ofwat spokesperson told Utility Week the regulator wasn’t expecting further guidance on upstream reform at this time. “The timetable set out in Water Act 2014 says that reforms won’t be there until after 2019 at the earliest,” the spokesperson said, adding that the document didn’t include anything unexpected.
“We’re continuing to work and support the upstream reform with Defra, and water resources are within Water 2020. We’ve got a December document coming out that’s updating the situation.”
The final Charging Guidance to Ofwat will be laid in Parliament for a period of 40 days from 9 November, and, if there are no objections, it will be formally published in December 2015.