In February 2014, Ofwat published its July 2013 response to Defra’s May 2013 consultation paper on the future management of private water supply pipes.
Ofwat states that the available evidence on costs and benefits is inadequate to form a final view on whether a transfer to water companies would be appropriate, but points out that analysis carried out in 2009 suggests that a transfer would impose a cost of over £4 on customer bills in return for only £2 of benefits.
Accordingly, Ofwat suggests that a market study should be undertaken to identify a range of possible solutions, ranging from information campaigns to raise customer awareness of supply pipe ownership, to some form of Government intervention to upgrade the pipes, or a transfer by means of a competitive auction for the pipes.
Ofwat concludes that a further advantage of pausing to undertake a market study would be a greater understanding of the costs arising from the transfer of private sewers.
Defra states that it received over 60 responses from a range of responders including water companies, local authorities, the plumbing industry, the building industry, professional bodies, trade unions, and individual members of the public.
In the light of these responses and the output from a piece of independent research which was separately commissioned, Defra is reviewing and updating its Impact Assessment to form part of the Government’s decision making process.