Everything you need to know about Ofwat
The water industry is complicated, with lots of different commercial and non-profit organisations involved in supplying high-quality drinking water to businesses and homes.
Ofwat oversees the English and Welsh water industry and regulates all the different components. In this guide, we explore the role of Ofwat.
Who is Ofwat?
Ofwat is a non-ministerial government department that acts as an economic regulator for the water industry. The role of the economic regulator is to improve the experience of water consumers by promoting competition for the private companies involved in the water industry.
For a recap of all the individual organisations involved in the British Water Industry, check out our comprehensive guide to understanding the British water industry.
Ofwat is responsible for ensuring the legal compliance of all water wholesalers and licenced business water suppliers operating in the English and Welsh water market.
Ofwat is funded by the water industry itself with licenced fees recovered from the water wholesalers.
What does Ofwat stand for?
Ofwat is an acronym for Office of Water Services.
What does Ofwat regulate?
Ofwat regulates the for-profit companies operating within the water industry. In the early nineties, the government privatised the water sector to promote competition and improve industry performance.
Privatisation of the sector means that many different for profit companies operate in the industry. Ofwat regulates these companies to ensure that their incentives align with the best interests of water customers and the wider environment.
Ofwat regulates the following companies:
Water and wastewater wholesalers
- Anglian Water
- Dŵr Cymru
- Hafren Dyfrdwy
- Northumbrian Water
- Severn Trent Water
- South West Water
- Southern Water
- Thames Water
- United Utilities Water
- Wessex Water
- Yorkshire Water
- Affinity Water
- Bristol Water
- Portsmouth Water
- South East Water
- South Staffs Water
- SES Water
Licenced business water suppliers
- Advanced Demand Side Management Limited
- Anglian Water Business (National) Limited
- Cambrian Utilities Limited
- Castle Water Limited
- Clear Business Water Limited
- ConservAqua Limited
- Everflow Limited
- First Business Water
- Olympos Water Limited
- Pennon Water Services Limited
- Pinnacle Business Water Limited
- Scottish Water Business Stream Limited
- Smarta Water
- Sutton and East Surrey Water Services Limited
- Veolia Water Retail (UK) Limited
- The Water Retail Company Limited
- Water Plus Limited
- Water 2 Business Limited
- Waterscan Limited
- Yu Water Limited
- Blue Business Water Limited
- Brightwater Limited
- Commercial Water Solutions Limited
- Pure (CGV) Limited
In the deregulated commercial water market, businesses can choose their business water supplier. Find the best deals available in the water market using our business water comparison service.
What are Ofwat’s future plans?
Ofwat’s overriding aim is to provide the very best service to customers whilst improving the environmental impact of the water industry. Ofwat each year publishes its strategic goals for the year-end. For the 2022-23 financial year, the strategic goals of the regulator are:
- Improve the performance of the water wholesalers by providing the right incentives.
- Collaborate with the wholesalers to meet the long term challenges of the industry.
- Drive the water companies to provide greater public value.
What is the Water Industry Act 1991?
The Water Industry Act 1991 sets out the duties of Ofwat as an economic regulator for the water industry. The act sets out that Ofwat must work to:
- Improve the experience of the end-users of water by promoting effective competition in the industry.
- Ensure that the water wholesalers carry out their legal obligations.
- Ensure that business water suppliers carry out their legal obligations.
- Ensure that water wholesalers are appropriately financed.
- Ensure that the long term viability of the English and Welsh water network is maintained.