Water (Special Measures) Act 2025

13 Special provision in charges schemes

(1) The Water Industry Act 1991 is amended as set out in subsections (2) and (3).

(2) In section 143A(3)(b), after “regulations” insert “or, in the case of regulations made by the Secretary of State (rather than the Welsh Ministers), by which that entitlement is otherwise to be established”.

(3) After section 143A insert—

“143AA Special provision under section 143A: financial arrangements

(1) Subsection (2) applies if regulations under section 143A impose on relevant undertakers whose areas are wholly or mainly in England requirements of the sort described in subsection (2)(d) of that section.

(2) The Secretary of State may by regulations establish a scheme for the purpose of distributing among the relevant undertakers that are subject to the requirements all or part of the costs incurred by them in complying with the requirements (with the distribution to be on such basis as is provided for in the regulations).

(3) The scheme may operate by way of—

(a) direct payments between relevant undertakers, or

(b) payments into and out of a fund established and maintained under the regulations.

(4) Subsections (5) and (6) apply if a scheme is established under subsection (2).

(5) If the Secretary of State or the Authority makes price control provision, they must design the provision with a view to not preventing the passing-on of costs as described in subsection (7).

(6) The Secretary of State may by regulations—

(a) make provision about how the Authority is to comply with subsection (5);

(b) modify the effect of any price control provision made by the Authority with a view to enabling the passing-on of costs as described in subsection (7).

(7) The passing-on of costs occurs when a relevant undertaker is able to recoup its relevant net costs by charging additional amounts under section 142(1).

(8) An undertaker’s relevant net costs are the total of its costs incurred in—

(a) complying with the requirements referred to in subsection (1), and

(b) complying with the requirements of the scheme,

less any payments it receives under the scheme.

(9) In this section, “price control provision” means provision made by or under—

(a) regulations under section 143A,

(b) rules under section 143B, or

(c) a condition of a relevant undertaker’s appointment under Chapter 1 of Part 2,

that restricts the amount that may be charged by a relevant undertaker under section 142(1).

(10) Where a determination within section 12(3) (determination by CMA provided for by undertaker’s appointment) involves the making of price control provision, subsections (5) and (6) apply in relation to the CMA as they apply in relation to the Authority.

143AB Special provision under section 143A: consultation

(1) This section applies to—

(a) regulations under section 143A that, in relation to relevant undertakers whose areas are wholly or mainly in England, make provision of the sort described in subsection (2)(d) of that section, and

(b) regulations under section 143AA.

(2) Before making regulations to which this section applies, the Secretary of State must (subject to subsection (3)) consult—

(a) the Authority,

(b) the relevant undertakers to which the regulations would apply, and

(c) such other persons as the Secretary of State considers appropriate.

(3) But the Secretary of State does not have to consult if—

(a) the regulations only amend earlier regulations, and

(b) the Secretary of State considers that the amendments are sufficiently minor that consultation is unnecessary.”

(4) The Digital Economy Act 2017 is amended as set out in subsections (5) and (6).

(5) In section 38 (disclosure of information to water and sewerage undertakers)—

(a) in subsection (2), for “people living in water poverty” substitute “eligible people”;

(b) after subsection (9) insert—

“(9A) A person is “eligible” for the purposes of this section and section 39—

(a) if the person is living in water poverty, or

(b) in the application of the sections to a water or sewerage undertaker for an area which is wholly or mainly in England, if the person is among those for whom special provision is required to be made by regulations within subsection (3)(a).”

(6) In section 39 (disclosure of information by water and sewerage undertakers), in subsection (2), for “people living in water poverty” substitute “eligible people (see section 38(9A))”.