Five-year business plan

Our five-year business plan for 2016-17 to 2020-21 sets out our overall approach for delivering our strategy, ‘Trust in water’ over the next five years.

Download our five year business plan

We update our business plan every year so that we always look five years ahead. It may change significantly from year to year, as circumstances change and our priorities evolve. So our work in 2016-17 to 2020-21 should be used as an indication only. It is based our current best estimates and assumptions. We consult on and publish our work programme for each year in our forward programme.

Our programmes

Using intelligence and analysis, we have identified a clear set of priorities for our work during 2016-17. To deliver them, we have identified a number of discrete but interlinked packages of work (‘projects’). We have organised the projects into themed areas (‘programmes’).

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Our approach to regulation

The original model of regulation has served customers well for more than 25 years. But our view is that companies can provide even better services if their plans are driven by customers, not just the demands of the regulator.

Our approach to regulation is based on us being clear about the results we want to see but giving more freedom about how companies get there. Where this happens, we can step back and allow the sector greater freedom to innovate and earn rewards where they deliver what customers want. Where the sector or others does not step up, we will step in to protect customers.

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Our values

Our values set out what it is like to work at Ofwat and are fundamental to how our people work and behave.

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Our five-year milestones

2016-17

See our forward programme for 2016-17.

2017-18

New market for water and wastewater retail services opens for eligible business customers in England.

Consult on our methodology for the 2019 price review – and publish our final methodology.

Publish annual results of water sector performance, financial resilience, service resilience and board, leadership and transparency principles.

Review a service area delivered by monopoly companies.

Publish Ofwat’s five-year business plan, forward programme and annual report and accounts.

Publish decisions on disputes and investigations as appropriate.

Reviewing the effectiveness of company social tariffs and update our affordability and debt report.

Assess the performance of the sector and the impact of our regulatory framework in supporting the UK Government’s ambitions for house building.

2018-19

Monopoly companies send us their business plans for the next price control period.

Publish the results of our risk-based review of monopoly companies’ business plans.

Publish first review of the non-household retail market in England, assessing the effectiveness of competition and how it is delivering for customers and whether customer protection is sufficient.

Publish annual results of water sector performance, financial resilience, service resilience and board, leadership and transparency principles.

Review a service area delivered by monopoly companies.

Consult on and publish revised board leadership, governance and transparency principles for regulated and holding companies.

Publish Ofwat’s five-year business plan, forward programme and annual report and accounts.

Publish decisions on disputes and investigations as appropriate.

2019-20

Publish our draft decisions (‘determinations’) of monopoly companies’ price controls for the next price control period.

Publish our final determinations of monopoly companies’ price controls for the next price control period.

Publish annual results of water sector performance, financial resilience, service resilience and board, leadership and transparency principles.

Review a service area delivered by monopoly companies.

Publish Ofwat’s five-year business plan, forward programme and annual report and accounts.

Publish decisions on disputes and investigations as appropriate.

2020-21

Publish lessons learned from the 2019 price review – and reconciliation rulebook.

Finalise the framework for monitoring and reporting on company performance for the next price control period.

Implement water resources and sludge markets, having worked with the sector to establish these in previous years.

Publish annual results of water sector performance, financial resilience, service resilience and board, leadership and transparency principles.

Review a service area delivered by monopoly companies.

Publish Ofwat’s five-year business plan, forward programme and annual report and accounts.

Publish decisions on disputes and investigations as appropriate.

Review the effectiveness of water and wastewater markets and their interactions with other markets.

Benefits

By delivering our programmes we will deliver a range of benefits and ensure we make progress towards the visions. And by working collaboratively or in partnership with our stakeholders we will deliver in the most effective and efficient ways – and provide opportunities for learning and growth for our people and for others.

  • Companies focus on the needs and desires of their customers and maintain a high standard of corporate governance – and comply with their obligations. Investors are confident in Ofwat and the water sector.
  • Markets work effectively in the best interests of customers and society.
  • Enhanced legitimacy for the sector.
  • Greater resilience.
  • Efficient and effective services for customers and the environment.
  • Costs kept down for customers, contributing to overall affordability and productivity.
  • Lower bills, better service, more innovation.
  • Fair dealing throughout the water and wastewater cycle.
  • Improved environmental and service quality for customers with greater service resilience.
  • Increased trust and confidence among customers and wider society in Ofwat and the water sector.
  • Customers and society enjoy more of what they want for less, as Ofwat is an effective and efficient regulator.
  • Regulation that is demonstrably value for money.

Resourcing our plan

To deliver our plan, we have challenged ourselves more than ever to improve our value for money and be more efficient. We are also developing a more diverse and flexible approach to delivering our work. This includes working closely with other regulators as part of the UK Regulators Network (UKRN).

We are funded from licence fees paid by the companies we regulate, and company licences set limits on the amount we are allowed to recover through those fees. However, the main constraint is caps set by the UK Government as part of the Comprehensive Spending Review (CSR) settlement through annual expenditure limits. Our financial strategy ensures we plan and use our resources to maximise strategic value and our own value for money.

Our business plan sets out the maximum revenue and capital budgets we are allowed for the period 2016-17 to 2019-20 under CSR. Our forward programme for 2016-17 sets out our planned licence fees for 2016-17.