UK water framework currently an "excessive regulatory burden"

LONDON, England, March 8, 2010 -- Water institution questions UK regulations further ahead of its annual conference...

LONDON, England, March 8, 2010 -- Current price-setting processes in England and Wales have led to an over-estimation of costs by some companies in preparing business plans, according to the Chartered Institution of Water Environmental Management (CIWEM).

The institution said there are other limitations of the current economic regulation framework, including a "focus on the short term" which has led to a lack of appreciation of the potential financial and carbon impacts of continuing increase in quality standards.

The comments follow on from a recent CIWEM survey where 87% of people asked supported a comprehensive review of the financial regulation of water (see Water & Wastewater International story).

Speaking at the time, Justin Taberham, director of policy at CIWEM, said: “It is clear that current financial regulation models for the water industry are ill equipped to deal with issues that have come to the fore, including sustainability, climate change, carbon accounting and resource efficiency. Current regulatory models are not seen as fit for purpose and have significant flaws including inflexibility and a ‘boom and bust’ business and asset management cycle."

There are a number of limitations of the current economic regulation framework, CIWEM went on to say, including that it can result in an "excessive regulatory burden" in terms of the amount of information required and that it provides incentives for meeting specific targets and carrying out defined activities, rather than providing best overall outcomes to customers and the environment.

The subject of sustainable regulation within the water industry will be discussed by Severn Trent Water at Water & Environment 2010: CIWEM’s Annual Conference on the 29th April at the Olympia Conference Centre, London. For more information, please visit http://www.ciwem.org/events/annual_conference.

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