Economic regulation policy
This policy paper sets out the government’s vision for modernising the economic regulation of the utilities sectors.
Documents
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 economic.regulation@beis.gov.ukeconomicregulation@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 alsoconsider holdhow anOfcom, openOfgem and Ofwat can promote economic growth when we publish a consultation paper on the proposalsreview inof springeconomic 2023regulation toin seekthe anycoming further views.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,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
Last updated
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A new update has been added to the call to action box in details stating: 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.
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The review of economic regulation announced in the January 2022 policy paper is now under way: see the Details section of the page for more information.
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First published.
Update history
2023-11-22 14:11
Updated with information on the economic regulation consultation launched on 22 November 2023.
2023-06-01 16:45
A new update has been added to the call to action box in details stating: 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.
2023-01-17 10:47
The review of economic regulation announced in the January 2022 policy paper is now under way: see the Details section of the page for more information.