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Regulating to protect consumers: Utilities, communications and financial services markets

The major UK regulators of essential services – Ofwat, Ofgem, Ofcom and the Financial Conduct Authority – all have primary statutory duties to protect the interests of consumers, who spend a total of £140bn a year on bills in water, energy, communications and financial services. It is important that regulators are able to measure and report their performance well, in order to: set out how they interpret their statutory objectives (which are necessarily high-level) into detailed aims, examine whether they are achieving their intended outcomes and take corrective action where necessary, and demonstrate credibly to Parliament and other stakeholders how well they are discharging their duties and addressing the key issues for consumers.

Our study will assess how well the four regulators measure and report their performance in protecting the interests of consumers. The study builds on our previous work on the topic, including our 2016 good practice guidance Performance measurement by regulators. In particular, we are examining: how well regulators understand the key issues that consumers face and define what they want to achieve; how well regulators measure their performance, understand their influence over consumer outcomes, and use this information to improve their own effectiveness; and whether regulators report performance publicly in a way that is useful for Parliament and other stakeholders to hold them to account.