Information note on regulation 8 (revised version)
Regulation 8 – Questions and Answers
Regulation 8 of The Private Water Supplies (England) Regulations 2016, and The Private Water Supplies (Wales) Regulations 2017 (“the Regulations”), set out the monitoring and risk assessment requirements for a specific type of supply arrangement termed ‘further distribution of supplies from water undertakers or water supply licensees’, commonly referred to as an ‘onward distribution system’, or a ‘private distribution system’. In this guidance, this arrangement will be referred to as a regulation 8 supply. A water undertaker and/or licensed supplier shall be referred to in this guidance as a water company.
What is a regulation 8 supply arrangement?
A regulation 8 supply is where one or more consumers indirectly receive a supply of water from a water company’s water supply system via a third party. In most cases this is via the third party’s own supply system.In these arrangements, the recipients are not water company customers and are not named on water companies’ billing systems. Instead, these consumers pay other parties for their water, or receive the water for free. Payments may be made to a site owner, a management company or any person or organisation other than a water company. In most cases, the other party recipient of these payments will be a water company customer who is directly billed by the water company.
When the other party purchasing and onwardly distributing the supply from the water company does not hold an appointment or licence, the charges they apply to consumers must comply with the Water Resale Order 2006. Ofwat has provided guidance on the Water Resale Order (the Water Resale Order is attached to the guidance at page 16).
Risk assessment of regulation 8 supplies
Local authorities must risk assess these supplies and review that risk assessment every five years thereafter, in accordance with regulation 6. When there is a potential danger to human health, local authorities are duty bound to enforce in accordance with regulation 18 (20 in Wales) of the Regulations.
The risk assessment of regulation 8 supplies should take account of any potential contraventions of The Water Supply (Water Fittings) Regulations 1999. The enforcement of these regulations is the duty of the supplying water company and so discussions with the water company should take place as part of the risk assessment. It would be efficient for local authority risk assessment site visits to be combined with Water Fittings Inspectors’ visits, as one will inform the other.
Monitoring of regulation 8 supplies
The monitoring requirements of regulation 8 supplies must be established on the outcome of the risk assessment. The test parameters and the frequency of testing should be reviewed, and amended as necessary, every five years as part of the risk assessment review.
Prohibition and offences
The creation of a new regulation 8 supply, and the use of a water company’s supply system, by someone other than a water company, is prohibited by virtue of the following sections of The Water Industry Act 1991 (the Act):
- Prohibition on connection without adoption: under section 51D of the Act, a water company must not allow a water main, or service pipe constructed by a third party (which is to be used for supplying water for domestic or food production purposes) to be connected to its supply system unless that water main / service pipe belongs to, or it is under the control of a water company.
- Offences of interference with works etc: under section 174 of the Act, it is an offence to attach a pipe (or apparatus) to any resource main, water main / other pipe belonging to a water company, without the consent of the water company.
Prohibition of the unauthorised use of a water company’s supply system
Subject to certain exceptions (in The Water Supply (Exceptions from Supply System Prohibitions) Regulations 2005 (“the Exceptions Regulations”), as set out below, section 66I of the Act prohibits the unauthorised use of a water company’s supply system, by someone other than a water company, for the purpose of supplying water to any premises of a customer or someone associated with a customer. To do so, constitutes an offence under section 66I of the Act.
In some circumstances a regulation 8 supply may also fall foul of section 66I of the Act, however, notwithstanding this, all regulation 8 supplies must be regulated by local authorities.
Exceptions
The Exceptions Regulations set out scenarios, set out below, in which section 66I prohibition does not apply:
- Situations in which one water company uses another water company’s supply system as part of an agreement or enactment, in relation to the supply of water in bulk (commonly called a “bulk supply agreement between water companies”); and
- Situations in which a person uses a water undertaker’s supply system “for the purpose of making a private supply to any premises” and does so under an agreement entered into with the water undertaker before 31 July 2002, with a supply of water made before that date.
Point 2 above effectively means that from 31 July 2002 no new regulation 8 supplies could be created. Any regulation 8 supply agreements entered into after that date are unauthorised and a supply under such an agreement is an offence. Regulation 8 supplies that were created before 31 July 2002 which lack a formal agreement with the water company are also unauthorised.
The arrangement whereby water from an existing licenced water undertaker is sold on to customers of a New Appointment or Variation (NAV) – sometimes called an inset appointment – does not constitute a regulation 8 supply. Whilst water is being onwardly distributed from a water undertaker’s supply system in this arrangement, it is being done so under licence. This means that a NAV is, itself, a water undertaker, providing a direct supply to its customers (albeit from a treated source). This is as a public supply.
However, any further extension of this arrangement (by connection to the NAV’s piped supply system) by someone other than the incumbent NAV constitutes an offence under section 66(I) of the Act. Where this arrangement exists, it must be regulated as a private supply in accordance with regulation 8.
It is not local authorities’ responsibility to investigate offences under section 66(I).