Ofwat has said that its forward work programme 2023-24 will include the conclusion of its project to consider how the water companies and the regulator can use insights from whistle-blowers to improve the water companies’ performance.
Ofwat has said that its forward work programme 2023-24 will include the conclusion of its project to consider how the water companies and the regulator can use insights from whistle-blowers to improve the water companies’ performance.
Ofwat’s draft forward programme for 2023-24, which is currently out for consultation, places particular emphasis on how the regulator will work over the coming months and use all its regulatory levers to drive further improvements in the water sector’s performance.
Commenting in the forward programme document, Ofwat Chief Executive David Black says that while the sector works to improve its current performance, it must also address the longer-term challenges posed by environmental degradation and climate change.
Pointing out that the scale of change and investment needed is substantial, Black says that the challenges facing the sector are significant, and there is a lot of work to do, commenting:
“Swift and purposeful action is essential to rebuild trust and improve services for the benefit of water customers today and for future generations.”
The regulator is currently considering licence changes which will allow Ofwat to take action where companies’ dividend payments are not clearly linked to performance for customers and the environment or where payments have not taken into account the need to maintain financial resilience.
The paper states:
“There has been a step change in scrutiny of sector performance in the past year. We have seen visible adverse impacts of companies’ activities on the environment, notably on rivers and bathing waters, and advances in the availability of data have enabled issues to be identified more readily...
“The sector needs to improve significantly and rapidly, and we need to work hard to drive companies to make those improvements.”
Pointing out that the challenges “are even more acute and the sector needs to sharpen and accelerate progress,” the paper says:
“There is a long way to go with company performance, and particularly strong and justified public concern at whether companies are acting effectively to protect the environment and ensure water supplies are resilient to future challenges.”
Ofwat also intends to follow up with the water companies on the water quality commitments they made in 2022 and on the areas of cross-sector and company-specific poor performance identified in its December 2022 ‘Water company performance report’, and where necessary take additional targeted action.
Commenting on the upcoming 2024 Price Review, Ofwat says it intends to establish a new performance commitment to improve the quality of service provided to retailers and business customers in the business retail market.
The regulator says it will also progress its enforcement investigation into companies’ operation of their wastewater treatment works “as quickly as we are reasonably able”, with the aim concluding the investigation by the end of the year.
Aim is to drive water companies to meet long-term challenges through increased collaboration and partnerships
Ofwat also takes care to emphasise that its focus is not just on immediate performance issues, but also on ensuring companies are resilient to future events, including the impacts of climate change. The intention is to drive the water companies to meet long-term challenges through increased collaboration and partnerships.
“A central feature of our approach in PR24 is the development of plans for 2025-30 which are set in the context of long-term delivery strategies and a more mature and effective approach to adaptive planning to enable companies to pivot more swiftly when change is required,” the paper says.
Ofwat expects to receive each appointed company’s business plan for 2025-30 by 2 October 2023, marking the start of the 14-month process leading to its final determinations on the business plans in December 2024.
With regard to the development and delivery of strategic water resource solutions via the RAPID programme, Ofwat intends to publish the standard gate two final decisions in Q1 and the assessment of gate three for those schemes on the accelerated track made over the summer 2023.
The regulator also intends to explore further is how it can best promote and achieve multi-sector involvement with water company solutions, to deliver developments that collectively work together on an integrated basis to provide multiple benefits to multiple stakeholders and to the environment, e.g. improved flood management and irrigation.
Within PR24 itself, Ofwat says it will scrutinise company submissions to ensure that current and future customers do not pay more than they need to for the services they receive.
The forward programme also draws out key themes across affordability, customer protection more generally and the environment to highlight Ofwat’s areas of focus for the coming year.
Closing date to submit comments on the consultation document is 5pm on Friday 17 February 2023.
Comments should be emailed to
Forward Programme Consultation response, Ofwat, Centre City Tower, 7 Hill Street, Birmingham B5 4UA
To discuss any aspect of the consultation contact Jenny Block on 0121 644 7645 or by email
Click here to read Ofwat’s Draft forward programme 2023-24 in full
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