The Independent Networks Association (INA) welcomes the publication of Delivering economic growth and nature recovery: An independent review of Defra’s regulatory landscape, led by Dan Corry. At a time when the UK faces urgent environmental and infrastructure challenges, this review marks a significant opportunity to create a smarter, more coherent regulatory system that can better enable sustainable growth and nature recovery.
However, the review’s silence on New Appointments and Variations (NAVs) is a significant omission.
Recognising the Value of Independent Networks
NAVs have become a key part of infrastructure delivery, particularly in the water sector. They provide around one in five new water connections in England and Wales, delivering essential services for new housing developments and regeneration projects. For developers, NAVs offer tailored, efficient and innovative services that meet modern expectations for infrastructure delivery.
Yet the current regulatory framework governing NAVs remains outdated. The site-by-site licensing model, unique to the water sector, imposes excessive administrative burdens and delays – in stark contrast to the more flexible regimes in gas and electricity. This approach is inefficient and undermines the very competition that Government policy elsewhere seeks to promote.
This regulatory drag must be addressed as the UK faces significant pressures to deliver new homes, support economic recovery, and meet net zero goals.
Key Recommendations the INA Supports
Several of the Corry Report’s recommendations closely align with the INA’s long-standing calls for a modern, proportionate and enabling regulatory framework:
- Recommendations 1 & 2: The introduction of refreshed regulatory outcomes and updated Strategic Policy Statements (SPSs) offers a much-needed opportunity to align the regulatory system with national priorities – including growth, net zero, and resilience.
- Recommendation 4: Rationalising the statutory duties and principles of Defra regulators is a pragmatic response to a system that has become overly complex. Importantly, the report avoids calling for structural mergers of regulators, instead focusing on improving coherence and accountability – a position the INA supports.
- Recommendation 7: The need to ensure regulators are appropriately resourced to support growth – including enabling them to recover the cost of services – is a vital step forward, particularly where under-resourcing has slowed decision-making.
- Recommendation 11: A rolling programme of reform, starting with the Water Framework Directive, should help remove unnecessary and outdated regulatory barriers, improving both effectiveness and agility.
Supporting a Risk-Based Approach
The INA particularly supports the report’s endorsement of a more risk-based approach to compliance and monitoring (Recommendation 17). Many of the current requirements imposed on NAVs, such as obligations under Water Resource Management Plans (WRMPs) and Drinking Water Inspectorate (DWI) targets, place disproportionate burdens on smaller, independent providers. These obligations often fail to reflect actual risks or deliver meaningful benefits for customers.
A more proportionate approach, tailored to the scale and nature of providers, would better support competition and allow regulators to focus resources where they have the greatest impact.
A Missed Opportunity for NAVs
Given these strengths, the absence of any mention of NAVs in the Corry Report is particularly disappointing. Reform of the NAV licensing framework is long overdue. INA has consistently made the case for:
- Licensing Reform: Moving to a national licensing regime would significantly reduce duplication, accelerate delivery and unlock much-needed private investment.
- Regulatory Alignment: Future SPSs – including those from devolved administrations – must respect statutory duties to promote competition. Inconsistencies, such as those seen in recent Welsh Government statements, must be resolved.
- Proportionate Oversight: Compliance frameworks should reflect the relative risk and scale of providers. NAVs should not be burdened with the same obligations as large incumbents where this adds no value to customers or the system.
Failing to address these issues not only hinders the benefits NAVs can offer but sends a concerning signal about the Government’s commitment to fostering effective market participation in the water sector.
Next Steps
The Corry Report sets out a useful direction of travel, but it is now up to Defra, regulators and industry to ensure the momentum is not lost. Reform must be implemented with a clear focus on outcomes and on removing systemic barriers to competition and innovation.
The INA stands ready to work with government and regulators to ensure reforms are deliverable and reflect the real-world conditions under which independent networks operate. Independent networks are already delivering over 300,000 new utility connections each year across Great Britain, and our members are well placed to support the next phase of infrastructure delivery – if the right regulatory conditions are in place.
Regulation should support, not stifle, innovation and investment. If the Government is serious about delivering sustainable growth and better outcomes for consumers, it must now go further than the Corry Report and commit to reforming the NAV framework.
