Putting the “Super” into Supervision: Developing Supervisory regulation for the water sector.
The challenge
How might we learn from the use of supervisory and ethical regulation in other sectors to inform the development of supervisory regulation for the water sector in England?
The Cunliffe Review identified supervisory regulation as a model that could be taken from financial services regulation and applied to the water sector. By introducing parts of a regulatory approach based on building a detailed and nuanced understanding of individual companies, the vision is to create a supervisory approach in which less reliance needs to be made on econometric models and benchmarking by also being able to use the insight and understanding of company supervisors.
The challenge for this Sprint is to take this ambition and explore how it could be turned into practice – what problems could supervision solve? What could supervision look like in the water sector? How can we make it most effective? And how can we avoid any potential pitfalls?
By the end of the sprint, we aim to deliver:
- Principles for employing supervisory regulation.
- A set of objectives for supervisory regulation.
- A target set of areas for supervision to focus on.
- A toolkit for supervisory regulation.
- Understand what guardrails are needed to ensure supervisory regulation builds trust.
Together, we will:
- Develop principles for employing supervisory regulation.
- Create a long list of areas of services the sector delivers and identify where supervision could be applied.
- Prioritise a short list of areas to focus supervision on in the near term.
- Explore the levers that could be available for supervisors and expand on how they could be applied in the water sector.
- Assess the potential risks of supervisory regulation and how to manage them.
Participants will collaborate through a series of structured and interactive sessions to:
- Day 1: Start with Why – Explore the problem we are trying to solve with supervisory regulation. Develop principles for supervisory regulation.
- Day 2: Survey the land – Hear from experts on supervision and ethical regulation in other sectors and understand what supervision can look like in practice.
- Day 3: Form a View – Explore the areas supervision could be applied to and focus in on objectives for supervision.
- Day 4: Super Powers – Investigate what a toolbox for supervisors might look like; examine risks supervision may create and how to mitigate them.
- Water company and partner organisation employees interested in regulation.
- People from sectors where supervisory regulation is used in practice (banking, financial services etc.)
- Regulators, and Government involved in the development of previous supervisory regulatory regimes or supervision in the water sector.
- Anyone who feels they can contribute to a better understanding of how to use supervisory regulation to make tangible improvements in the water sector.