Watchdogs show their pedigrees: Each privatised utility has a regulatory body but what do they do and how much do they cost?
Sunday 12 December 1993
ORR - or Ofrail, as it is unofficially known, though for obvious reasons the abbreviation does not appeal to the Department of Transport - is the latest in a growing band of regulatory bodies created to monitor the privatised utilities and contracted-out services.
So what do they do and how much do they cost the public whose interests they are there to serve?
Below, we look at a litter of Ofdogs.
Office of Fair Trading (OFT)
The oldest of them all, OFT was set up in 1973 to safeguard the interests of consumers. It regulates consumer affairs and formulates competition policy, with investigations into companies allegedly engaged in anti- competitive conduct. OFT is headed by Sir Bryan Carsberg, who cut his regulatory teeth in an eight-year stint at the Office of Telecommunications and is a keen advocate of competition in the marketplace. He has 430 staff and a pounds 19.3m budget.
Office of Telecommunications (Oftel)
Established in 1984, Oftel has sole responsibility for monitoring public telecommunications operators and enforcing the terms of their licences. It also has the authority to modify those licences where necessary. The present director-general, Don Cruickshank, now oversees the tough new price-capping formula that was Sir Bryan's parting shot. He can call for assistance on 150 permanent staff and additional casual labour when necessary, but new statutory duties will soon add another 20 people to the payroll. Regulating BT and its brethren cost pounds 8.1m for the year ending March 1993.
Office of Gas Supply (Ofgas)
With the privatisation of British Gas in 1986 came nemesis in the shape of Ofgas and Sir James McKinnon, the prickly Scottish accountant who was its first director-general. In November he was replaced by Claire Spottiswoode, who has already shown herself a less explosive and more hands-on regulator. She heads a team of 46, which swelled, along with the pounds 3.9m budget, during the recent investigation of British Gas by the Monopolies and Mergers Commission.
Office of Water Services (Ofwat)
Ian Byatt, director-general of Water Services since Ofwat was set up in 1989, is responsible for the economic regulation of water and sewage services. The Birmingham-based office has an estimated 130 permanent staff - many of them employed on 10 regional Customer Service Committees - and another 30 on short-term contracts. It cost pounds 7.52m to keep the water companies in check last year, but the budget has soared to pounds 9.7m for the year ending March 1994, as additional work is required to complete a periodic review of the industry.
Office of Electricity Regulation (Offer)
Established in 1989, in the run- up to the creation of the regional electricity companies, Offer is headed by Professor Stephen Littlechild, the most academic of watchdogs at a private utility. Littlechild presides over a total of 216 staff and has a budget of pounds 10.5m for the year ending March 1994. Offer's costs - like those at Ofwat - have increased in line with its expanded workload resulting from a periodic review of the electricity industry.
Office of Standards in Education (Ofsted)
Set up in September 1992, Ofsted is not a quango, which puts it into a slightly different category from its fellow Ofdogs. Headed by Professor Stewart Sutherland, HM's Chief Inspector of Schools, it has two basic functions: to monitor the four-yearly inspection by third- party contractors of every single school in the country; and to provide training for new inspectors, complete quality checks and advise the Secretary of State for Education. Ofsted has a total staff of 500 and a budget of pounds 56m.
Office of Passenger Rail Franchising (Opraf)
The 1993 Railways Act has resulted in the creation of Opraf and the appointment of Roger Salmon as franchising director in November. His job is to attract private sector interest in the provision of passenger services under franchise agreements and to monitor the payment of subsidies. He will also be expected to protect the interests of passengers and promote the greatest economic use of the network by encouraging competition, efficiency and economy on the part of the franchise operators.
Office of the Railway Regulator (ORR)
The same Act has spawned the new Office of the Rail Regulator, which currently has 15 staff, although this should reach 35 by the time ORR becomes operational in April. It has permission to employ up to 91 people as its responsibilities increase. These include issuing licences to new railway operators and resolving disputes about access to the network by international services. ORR is also charged with protecting rail-users' interests and promoting the development of the network and competition for its use. Cynics may spot similarities with Opraf.
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