A report in yesterday’s Financial Times says that the Conservatives are in the process of developing policies to increase competition among utilities – including the water sector.

Water industry regulator Ofwat has published proposals outlining how it expects companies to submit their business plans for the regulatory period 2015-2020, as it reveals its risk-based approach to reviewing companies’ strategies.

The Department of Environment, Food and Rural Affairs (Defra) has flagged up crucial gaps in the existing evidence base used to support Government decision-making in key areas of water sector policy, including flood and coastal erosion risk management, drinking water quality and water availability.

The Environment Agency has launched a consultation on a proposal to use Environmental Improvement Unit Charge funds to implement hydromorphological measures - the outcome could have potentially significant implications for the amount of compensation currently paid to water companies when abstraction licences are withdrawn.

Chancellor George Osborne has set out plans in the Budget for a “generous” tax regime for the emerging shale gas industry in the UK, which will undoubtedly bring opportunities for companies involved in water treatment.

Water companies should treat the interests of customers as at least as important as those of shareholders, according to Jonson Cox, the recently appointed Chairman of the water industry regulator Ofwat.

In an opinion piece for Waterbriefing, Gavin Shuker MP, Shadow Water Minister is calling on the Government to go back to the drawing board and think again on its proposals for the water sector to avoid repeating the worst mistakes of water privatisation, describing its plans for upstream competition as half-baked.

MPs on an influential House of Commons Committee have strongly criticised the Government for failing to act swiftly on flood issues and dragging its heels on implementing the Draft Water Bill.

Ofwat has announced proposals to change the way it regulates the water and sewerage sectors in a bid to drive more efficient, customer-focused companies, and ensure more sustainable water use.

Severn Trent, United Utilities and Northumbrian Water are among several water companies this week to accept Ofwat’s latest proposals to modify licence conditions.