The water regulator has called on companies to bring requirements for self-lay providers (SLPs) in line with those for their own staff and contractors, after SLPs argued the lack of consistency had created a barrier to competition.
Ofwat wrote to companies following a lack of action taken after its review of the Code for Adoption Agreements in 2017-18, which highlighted misalignment between accreditation requirements.
The Code covers agreements developers or self-lay providers (SLPs) enter into when they want an appointed water company to take over responsibility for infrastructure they have constructed.
The SLP community criticised changes to the Code in 2019 as unsatisfactory.
Following the consultation by Water UK and review by Ofwat, inconsistencies were noted between the accreditation requirements for SLPs from the Water Industry Registration Scheme (WIRS) that not all water companies require of their contractors or staff.
SLPs argued this was anti-competitive because it prevented SLPs that are unable to spend time and more on accreditation from participating in the market. It was also suggested that it caused delays and barriers when taking on new staff for SLPs that water companies did not experience.
In an open letter to the sector, Michael Deakin, performance and outcomes principal at Ofwat, said it was disappointing that no sector-wide action had been taken after the consultation in response to SLP concerns.
He added there was “room for improvement” and Ofwat expected water companies to take the lead to create greater consistency in what is expected from contractors and staff compared to SLPs.
He suggested this could be achieved by moving towards all companies using WIRS accredited contractors; or extending specific arrangements to SLPs that currently apply to contractors and water company staff.
To remove the labour barriers, Deakin suggested workers should be able to freely move between companies, contracted firms and SLPs via a skills and experience record scheme; or by amending the WIRS to allow SLPs to hire experienced staff without having to train them in line with current WIRS requirements.
At present not all companies require their contractors to be WIRS accredited. For Northumbrian, SES, Southern, South West and Yorkshire the obligations are consistent, however other companies have different competency criteria and assessments to ensure quality of work.
Deakin said companies needed to ensure the quality and longevity of adopted assets so they can fulfil their long-term obligations around safety, resilience and reliability of supply. He noted the importance of SLP accreditation ensured SLPs would provide quality infrastructure despite not having the lifetime responsibility for the assets.
Companies are required to set out what changes they will make and milestones for them by 30 November.