Some notes about Regulation

The British regulatory model is an evolving one. It started out as a reaction against both the nationalised industry controls, and the perceived failures of US rate of return regulation. In the mid 1980s, the zeitgeist was one of markets, liberalisation, competition and private ownership. RPI-X was invented as a deliberately simple and temporary way to mimic the market, but only for so long as it took for competition to do away with the need for regulation at all. This applied to BT in 1984, it was expected to wither away after 7 years.

In practice it has gradually morphed into a detailed and permanent set of interventions for the core monopoly infrastructures. Regulation now controls price and outputs, and it has developed techniques to address the asset bases, the cost of capital, the operating efficiency and capital expenditure.

Regulation, built in this piecemeal way, has become heterogeneous. Each regulator has followed a specific path. OFGEM pioneered RIIO, with 8-year periods, whilst OFWAT sticks to 5. OFGEM has indexed the cost of debt, OFWAT has not. ORR has had to accommodate a much greater role for the state, whilst OFCOM has struggled with the emerging USO for broadband. Large infrastructure projects have attracted their own unique contractual frameworks. Hence the detail matters, as is explored in each part below.

 

Regulation

Regulation
Transport

Regulation
Communications

Regulation
Infrastructure

Regulation
Regulation

Latest Publication

handwheel 1096406 1920

Thirty years after water privatization—is the English model the envy of the world?

November 11, 2019

Regulation Publication

The paper considers whether water privatization 30 years ago has delivered the promised superior performance to nationalization, which remains the dominant model in Europe.

Publications

  • Publication Infrastructure It's not over yet: the implications of the credit crunch
    October 29, 2007

    2007 will go down in economic history as a roller-coaster – it’s not often that we see a global credit crunch which requires over half a trillion dollars to stabilise, and a run on a major London bank. The former occurs roughly every quarter of a century,
  • Publication Regulation Real Interest and the Return to Normalcy
    July 25, 2007

    What drives markets in the end are fundamentals, and few variables are as important as the real interest rate—the return, after inflation, on relatively risk-less assets. It determines one part of the return on savings, and it feeds through into the relat
  • Publication Transport Reforming Airport Regulation
    June 11, 2007

    The current debate about the future of airport regulation in the UK has arisen for a variety of reasons, which have together built up a substantive case for reform. In addition to the customer and airline complaints on the quality of service, the takeover
  • Publication Communications BBC Paper on Future of the Licence Fee and its Regulation
    January 29, 2007

    The 2006/07 renewal of the Charter and the settlement of the licence fee have not resulted in a consensus as to the future of the BBC.
  • Publication Regulation OXREP Special edition on regulation
    June 1, 2006

    Oxford Review of Economic Policy, special edition on regulation, summer 2006
  • Publication Regulation Ownership Utility Regulation and Financial Structures: an Emerging Model
    January 14, 2006

    Recent corporate activity and the emergence of highly geared companies in the utility and infrastructure sectors have raised fundamental questions about risk, returns and the appropriate responses from investors and regulators. A gradual revolution has be
  • Publication Regulation The Case for Regulatory Reform
    July 31, 2005

    In D. Helm (ed.), The Future of Infrastructure Regulation, published by Oxera, July 2005, pp. 1-9. It is tempting to think that, after two decades of experience, regulation might have moved from the controversial and novel, to the tried and tested, that c
  • Publication Infrastructure The Future of Infrastructure Regulation
    July 31, 2005

    Edited by Dieter Helm, published July 2005 by Oxera. Based on the speeches of regulators and companies in the infrastructure and utilities industries, presented at the Oxera conference, The Future of Infrastructure Regulation, on March 1st 2005, this volu
  • Publication Communications House of Lords Select Committee on the BBC Charter Review Evidence
    July 5, 2005

    Minutes of Evidence Taken Before the House of Lords Select Committee on the BBC Charter Review, July 5th 2005.
  • Publication Communications Consumers, Citizens and members: Public Service Broadcasting and the BBC
    January 21, 2005

    Dieter Helm's chapter from the BBC book 'Can the Market Deliver? Funding Public Service Television in the Digital Age', published January 2005 by John Libbey Publishing, pp. 1-21.
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