Tom Melhuish 6 min read

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 markets.

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 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 (control domestic and business water rates).

💡Recent Ofwat initiatives include:

Enforcing a reduction of raw sewage discharges into rivers.
Introduction of rising block water tariffs.
Allowing businesses to utilise water abstraction rights.

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.