Ofwat is the economic regulator for the water and sewerage industry in England and Wales. In December 2004 it set price limits for the period 2005-10. In setting these price limits, Ofwat assumed that the industry would spend £18.3 billion (in today's prices) over the period 2005-10 on its capital investment programme.
Although companies have generally delivered the environmental outputs that were expected for 2005-06, levels of investment across the full range of companies' activities have fallen short of Ofwat's assumptions. Their total capital investment for 2005-06 was £3.4 billion, compared with the £4.3billion that Ofwat expected. Ofwat's detailed 2005-06 report, 'Financial performance and expenditure of the water companies in England and Wales', has been placed in the Library of the House.
The regulators will continue to monitor how the companies' perform, focusing on making sure that full investment programmes are delivered for the period up to 2010.