How a regulatory system works in practice
A Water Services Association case study

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Page 1: Introduction

Water Services Association 3 Image 1The term utility is widely used today to include those public services which supply water, sewerage, electricity, gas, telecommunications and waste disposal. All of us use these utilities every day - when we have a bath or a drink of water, light a gas fire, boil water for a cup of tea or coffee, or turn on the light.

Until the 1980s, most of these utilities were owned and run as part of the public sector of the economy. In other words, they were run by government appointed business organisations to serve the needs of millions of individual households, industry and commerce. Because the government owned these organisations, it was able to direct the utilities to serve the public interest.

However, during the 1980s, ways of thinking about how businesses should operate changed. There was widespread feeling that the utilities could become more efficient if they were subject to competition and if they were run as public companies accountable to shareholders. The 1980s and the first half of the 1990s were characterised by privatisation - a process whereby the ownership of organisations passes from the government to private shareholders by the issuing and selling of shares.

Water Services Association | How a regulatory system works in practice