This policy paper sets out the government’s vision for
modernising the economic regulation of the utilities sectors.
From:
Department for Business
and Trade and Department for Business,
Energy & Industrial Strategy
Published
31 January 2022
Last updated
1 June 2023 — See all updates
Documents
Economic regulation policy
paper (PDF)
PDF, 384
KB, 26 pages
Economic regulation policy
paper (accessible webpage - HTML)
HTML
Details
Update: 17 January 2023
The review of economic regulation announced in the January 2022
policy paper is under way.
As the original paper set out, the review will look into the
economic regulation of the energy, water and telecoms sectors,
including:
- regulators’ duties
- how regulators can enhance competition and innovation
- how respective regulatory appeals processes work
In addition, it will now also consider:
- how to encourage greater investment
- how to enhance the consumer experience in these sectors
We will engage with government departments, regulators,
academics, businesses and other interested parties over the
coming months to help inform policy proposals. If you would like
to be involved in the review, please email economicregulation@beis.gov.uk.
Update: 1 June 2023
The Smarter Regulation to
Grow the Economy policy paper, published on 10 May 2023,
set out the importance of economic growth. We will consider
how Ofcom, Ofgem and Ofwat can
promote economic growth when we publish a consultation paper on
the review of economic regulation in the coming months.
This paper is about the future of economic regulation of the
water, energy, and telecoms sectors in the UK. It follows a
commitment in the government’s National Infrastructure
Strategy to produce an overarching policy paper in this
area.
The government agreed with the National Infrastructure
Commission’s recommendation that, though the UK’s regulatory
framework has delivered significant benefits, it needs updating
and strengthening as it is increasingly facing emerging and
long-term challenges that it was not designed to address.
The paper covers the following areas:
- how the government intends to ensure that the regulators’
duties will allow them to meet these systemic challenges,
conducting a review of duties
- how the government will provide strategic clarity on our
long-term aims for these sectors, publishing a letter of
strategic guidance to the CEOs of Ofwat, Ofgem and Ofcom
- how competition for strategic investment opportunities can be
enhanced for the long-term benefit of consumers and investors
- how transparency and consistency in key processes can be
improved, in particular seeking greater consistency, and working
towards a common methodology, where appropriate, for the weighted
average cost of capital when setting price controls
The paper is the first step to updating our model of economic
regulation. We will launch a consultation setting out more detail
on a package of measures to ensure the UK model of economic
regulation fits the needs of the modern age.
Related content
Open letter of strategic
guidance to the utilities regulators
