Utility regulators warned to keep an eye on the bug

The National Audit Office has criticised UK utility regulators for their handling of Year 2000 compliance monitoring.

The report claims the watchdogs have not understood the importance of assessment by independent companies and recommends much stricter monitoring of power and water companies in future.

"There are gaps in the utility regulators' knowledge of what the companies are doing to address the millennium problem, for example, information on the companies' contingency plans for dealing with failures arising specifically as a result of the millennium bug," said the report.

However, regulators Ofwat, Offer and Ofgas all claim to be well advanced in contingency planning and to have already appointed independent auditors.

The remarks come less than a month after the government advisory body, Action 2000, praised the regulators for their Y2K work.

Gwynneth Flower, managing director of Action 2000, said she welcomed the report but warned it was based on information gathered until December last year. Since that date regulators have already been carrying out many of the report's recommendations, she said.

Ian Hugo, assistant director of Taskforce 2000, said: "The only answer is that utilities should be made to publish project status information so that people can analyse how they really are getting on.

"For example, with the central government sector there are various ways you can get a progress reading - either from the government or from independent analysis. With the utilities you only get two separate government bodies coming up with different conclusions - and no one coming up with the base information," he said.