The regulator’s new approach is a development of that used in the PR14 price review and continues to focus on outputs.
As part of the new strategy, Ofwat launched a new resilience working group, which will be chaired by Waterwise managing director Jacob Tompkins.
The working group will discuss with the sector over the coming year exactly what resilience – the ability of the companies to provide secure water and wastewater services to customers – means for the companies and the sector.
At the launch event, Tompkins said the working group reflected a “new way of working within Ofwat” which engages with all stakeholders – including the customers.
He added: “We need to engender a debate on how we deliver over the next five years and indeed over the next 25 years. It’s a paradigm. This is very new territory we are entering into and require a completely new approach from water companies.”
He said that “the door has been thrown open and it is up to to do whatever they think is right”.
Ofwat chief executive Cathryn Ross said the working group is a “great exemplar” of the new strategy and the principles based approach to regulation, which develops that used in PR14.
The four key elements of the strategy outlined by Ross are: to deliver on the reforms set out in the Water Act – including preparing for non-domestic competition and abstraction reform; maintaining investor confidence; developing the assurance framework; and assessing Ofwat’s own capabilities.
She said: “This strategy will – like in the price review – give the companies more flexibility to do the right thing.
“We will be looking to companies to provide us with assurances they are doing the right thing in ways genuinely commensurate with the responsibilities we place on providers of vital public services.
“We will celebrate success where we see it – that is very important – but where we have to intervene that’s what we will do in proportionate and targeted way.”
Ross added the new strategy and “all the conversations” in the sector will help to set the agenda “from now up to and including the next price review.”