The Independent Commission led by Sir Jon Cunliffe made a series of recommendations on reforming the regulation of the water industry, including the consolidation of regulators, and giving them new powers similar to those in financial services. The regulator would be given more prudential powers to ensure the financial stability of water companies, greater control over planning and delivery of projects, more flexible price setting powers, a new senior managers regime to regulator conduct of executives, and a new role as a supervisor, in closer contact with the water companies.
Many of these regulatory roles are new for the water sector, but are highly familiar in financial services where they are largely derived from, and where it has been shown what works, what doesn’t, and what is proportionate, and what isn’t. Prysm Global used its unrivalled experience of financial regulation – both from the regulator side and industry side – to advise a range of stakeholders in the water industry about the approach to take on the wide range of issues raised by the reforms. The devil is always in the detail in regulatory reform, and it is in the water industry’s interest to work with the Government in designing and implementing the reforms – but to do that successfully, it needs to have a clear idea of how they would work in practice.