Water privatisation is the delivery of water by a private business, in place of a government body. Privatisation of the water industry in England and Wales occurred in 1989, when 10 Regional Water Authorities were created as part of a wider government strategy to transfer the ownership and management of public assets. This was followed by the creation of a new regulatory framework and government bodies such as the Drinking Water Inspectorate, the Office of the Director General of Water Services (Ofwat) and the National Rivers Authority to regulate these privatised companies and English and Welsh water standards.[1]
Despite there being 25 water companies in England, Scotland and Wales, the privatisation created natural monopolies with very few customers able to choose their supplier. It is for this reason that water prices and service standards are set by Ofwat. There is, however, an element of competition in commercial water supply.
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[1] Potton E., & Adock, A., Future of the Water Industry in England and Wales, House of Commons Library, 21 January 2019.