The United Kingdom of Great Britain and Northern Island, commonly known as the United Kingdom, is an island country located off the northwestern coast of mainland Europe. The country comprises the whole of the island of Great Britain – England, Wales, and Scotland – as well as northern portions of the island of Ireland.
Each part of the United Kingdom has a distinct system of local government with its own complexities and peculiarities. In general, they have few legislative powers outside the central government's legal framework. However, local governments are in power to charge residential and business council taxes which make up part of their funding, along with fees for various community services and grants from the central government.
Country Overview | Year | |
---|---|---|
Population | 2021 | 67,326,569 |
Country Area (km2) | 2021 | 243,610 |
GDP (billion USD) | 2021 | 3,130 |
GDP per capita (USD) | 2021 | 46,510.3 |
World Bank Income Group | 2022 | High Income |
World Bank Region | 2022 | Latin America and the Caribbean |
Water and Wastewater Sector Structure
The four constituent countries comprising the United Kingdom differ in terms of water and wastewater sector structure. The regulated water and wastewater sector in England and Wales has been privatized since 1989. On the other hand, Scottish Water and Northern Ireland Water, countries’ sole water and wastewater service providers, are both government-owned utilities.
There are 13 water and sewerage companies (WaSCs) and 6 water only companies (WoCs) – 15 of them in England, 2 in Wales and one each in Scotland and Northern Ireland. Each of these utilities are serving no less than 500,000 people and their service area spans across different administrative boundaries making them more of regional service providers. There are also some smaller private companies providing water or wastewater services only to limited areas.
Water tariffs and utility bills are main sources of revenues for utilities in England and Wales. However, as privately-owned companies, they also have unrestricted access to a number of sources of commercial finance, such as international loans and bonds.
Scottish Water’s revenues also mainly depend on utility bills, but any deficit is met by public funding, mainly in the form of government loans for financing capital investment.
Northern Ireland Water is primarily dependent on public financing. Residential customers receive government subsidies and do not pay for water, while non-residential customers do not enjoy that privilege and are charged for water provision.
Authority | Level | Role |
---|---|---|
Department for Environment, Food and Rural Affairs (Defra) | National | Sets the overall water and sewerage policy in England, including standard setting, legislation drafting and special permit issuing. |
Environment Agency | Regional | The environmental regulator of the water and sewerage sector in England, aims to protect and improve the environment of England by maintaining the integrity of water quality and resources, among others. |
Drinking Water Inspectorate (DWI) | Regional | Drinking water regulators in each constituent country, making sure that utilities in England, Wales and Scotland supply water that is safe to drink and meet the drinking water standards. |
Water Services Regulation Authority - Ofwat | Regional | Independent economic regulator for water and sewerage sector in England and Wales. |
Department for Infrastructure (Northern Ireland) | Regional | Responsible for policy on water and sewerage services in Northern Ireland, as well as management of the department’s shareholder interest in Northern Ireland Water (NI Water), the region’s sole water utility. |
Northern Ireland Utility Regulator | Regional | Economic regulator of the Northern Irish water and wastewater sector, responsible for setting price controls for NI Water. |
Scottish Government | Regional | Responsible for overseeing Scottish Water, the government-owned water utility serving the whole of Scotland. |
Water Industry Commission for Scotland (WICS) | Regional | Independent economic regulator for water and sewerage sector in Scotland, basically for regulation of Scottish Water. |
Scottish Environmental Protection Agency | Regional | The environmental regulator in Scotland, responsible for protecting the environment in Scotland, including the quality of water resources. |
Welsh Government | Regional | Similar to the Department for Environment, Food and Rural Affairs, it sets the overall water and sewerage policy framework in Wales. |
Natural Resources Wales | Regional | The environmental regulator of the water and sewerage sector in Wales. Responsible for protecting the environment and promoting sustainable development. |
Consumer Council for Water (CCW) | Regional | Consumer watchdog, presents consumers within the water and sewerage sector in England and Wales. |
Water and sewerage companies (WaSCs) | Regional | Providing water and wastewater services in England, Wales, Scotland, and Northern Island, 13 in total. |
Water only companies (WoCs) | Regional | Six utilities that provide only water services in England and Wales. |
The quality of water and wastewater services in England and Wales is regularly monitored by the economic regulator Water Services Regulation Authority, commonly known as Ofwat. The duties of Ofwat are laid down in the Water Industry Act 1991 (as amended) which makes sure that WaSC and WoCs properly carry out their licensed activities and statutory functions, and are financially sustainable in doing so, among others.
Ofwat’s central responsibilities are placed around fair pricing of water tariffs, the financial stability of water and sewerage companies, and the fulfillment of their license requirements. This is regulated through Asset Management Plan (AMP) periods of five years during which Ofwat sets allowable price increases for water and sewerage companies, as well as many key performance indicators such as water quality and customer service. For every AMP period, water and sewerage companies submit to Ofwat their detailed business plans outlining how they would meet the needs of their customers during the respective period. Ofwat would then scrutinize all of the business plans, publish an assessment of each company’s plan, and categorize them according to the level of quality, ambition, and innovation they have demonstrated.
Water and Wastewater Regulations
Legislation and Policies | Year | Description |
---|---|---|
Water Industry Act | 1991 | Sets out the main powers and duties of the water and sewerage companies, replacing those set out in the Water Act 1989, and defines the powers of the Ofwat. |
Water Resources Act | 1991 | Sets out the functions of the National Rivers Authority (currently, Environment Agency) and introduces water quality classifications and objectives. |
Competition Act | 1998 | Prohibits any agreements between companies that prevent, restrict or distort competition. It also prohibits any abuse of a dominant market position. |
Water Act | 2014 | Enables greater competition for non-household customers by allowing them to choose their water suppliers. It also gives Ofwat new powers to make rules about charges and charges schemes. |
Water Supply (Water Quality) Regulations | 2000 | Sets legal standards for drinking water quality. |
Areas of Regulation
Areas | OFWAT |
---|---|
Tariff Calculation | Yes |
Tariff Approval | Yes |
Licensing Water and/or Wastewater Service Providers | Yes |
Business plans approvals | Yes |
Performance indicators monitoring | Yes |
Economic Data Collection | Yes |
Technical Data Collection | Yes |
Utility | Date | Link |
---|---|---|
Anglian Water | April 2023 | Tariff |
Northern Ireland Water | 2019 | Tariff |
Thames Water | April 2023 | Tariff |
A full list tariffs for utilities in the United Kingdom can be found in the IBNET Tariff Database - United Kingdom