The UK’s model of regulation for energy, water and telecoms has generated significant investment over the past decades but it is increasingly facing new challenges that it was not designed to address. Regulators, industry and government must now adapt to face the coming challenges of achieving net zero, adapting to changing weather patterns, and increasing digitalisation.
The system must be strengthened and updated, and public and political confidence in it must be improved.
Recommendations made by the Commission to achieve this include:
- Regulators Ofcom, Ofgem and Ofwat should have new duties to promote the achievement of net zero carbon emissions by 2050 and improve resilience
- The government should set out a long-term strategic vision for each of the regulated sectors, through strategic policy statements within the first year of each Parliament, to support lasting plans and stable funding
- Most major strategic investments should be removed from the price control processes and opened to competition to support innovation
- Regulators should be able to prevent companies from engaging in price discrimination that does not provide an overall benefit to consumers
- The UK Regulators Network should be given a stronger leadership role through the appointment of an independent chair to promote collaboration and coordination, and ensure markets continue to deliver for consumers.
This is the final report of the Regulation Study.
The Commission was asked by the government in October 2018 to review the regulation of the UK’s energy, telecoms and water industries to ensure the necessary levels of investment and innovation, while ensuring these critical services are kept affordable for everyone. The terms of reference are available here.