The management of the water service in the United Kingdom

With the 1989 Water Act, the ten Water authorities in England and Wales became private limited companies. The 1989 Act provided a full privatisation of water and sewerage services and transferred the rivers management to a newly created National Rivers Authority (NRA). The NRA was later to be subsumed within the Environment Agency with the Environment Act 1995, even if many of the substantive law provisions remained unchanged. The UK Government primarily justified the privatisation of some of its services (including the water service) on the terms of a need for a regulation. Being the water companies natural monopolies, which provide essential services to the population, it is in the public interest that the State provides a form of regulation for their economic activity. Therefore regulator authorities were established to watch on the water industry.This kind of ‘economic regulation’ , provided by the UK Government in the water service, as well as in other privatised sectors, represents a key-element in this matter. This paper analyses the management of the water service from this point of view, by initially describing the legislation about the water industry, and then focusing on the regulation of the privatized water companies in England and Wales. The ‘economic regulation’ has characterized the water sector creating a sort of tension between the public subjects (i.e. the Government), the private actors (the water companies), the regulators (i.e. the Water Service Regulation Authority-OFWAT) and the customers (individuals or association). Actually such a tension is strongly influencing the carrying out of the water management in the UK.