Our forward programme 2024-2025 consultation sets out the work we propose to do over the coming year to improve water companies’ performance and prepare the sector for longer-term challenges.
We know the water sector faces profound challenges associated with climate change, population growth, and, increasingly, public distrust as a result of operational and corporate governance shortcomings, and high-profile concerns about the sector’s environmental impact.
Companies need to show their customers and the communities they serve that they are listening and taking effective action.
Companies need to modernise, to open up, and be laser focused on delivery of what they have promised to do. They must embrace the possibilities from AI, big data and disruptive tech, and make greater use of nature based and catchment-based approaches.
And we recognise that our regulation will also need to change, to modernise, if we are to hold companies to account effectively. We will also have to continue to be transparent, open and accessible and strive to improve our own efficacy and efficiency.
Our strategy ‘Time to act, together’ focuses on three core objectives: to transform water companies’ performance; to meet long-term challenges; to deliver greater social and environmental value. We are continuing to use these objectives to help drive our work forward and ensure the sector delivers for consumers and the environment.
Here’s an overview of our proposed key priorities for the next year.
2024 price review
The 2024 price review (PR24) is the overarching programme of work this year, which will shape the delivery of critical infrastructure and investment for 2025-30 and beyond. Our ambition through PR24 is also to see companies’ five-year business plans set in the context of long-term delivery strategies.
Transforming water companies’ performance
We intend to further develop our approach to monitoring company performance in 2024/25, to generate deeper insight into where there are performance issues for specific companies or at a sector level.
We required all companies categorised as ‘lagging behind’ in the 2022/23 Water Company Performance Report to prepare service commitment plans and to report to us regularly on their delivery progress. We will continue to engage with each company to challenge them to deliver progress against these plans.
Protecting customers
Our new customer-focused licence condition, put in place in 2023/24, is aimed at establishing high standards of customer service and support for the full diversity of customer needs. It sets out the principles that companies will be required to meet and will give us the power to take action against companies who fall short.
Enforcement
We will aim to conclude our current enforcement cases into companies’ operation of their wastewater treatment works and networks; and continue to assess whether further enforcement action is required against the other companies in our overarching investigation of all wastewater companies.
Markets
In collaboration with the business retail Market Operator, MOSL, and market participants, we will continue the drive to resolve market frictions in the business retail market, and so improve company performance.
Collaborating to meet long-term challenges
Addressing population growth and improving drought resilience will require significant improvement in water efficiency, as well as major new infrastructure such as reservoirs and interconnectors. We will be increasing our capacity to support a significant increase in the programme of major infrastructure projects. Major initiatives include:
- Continuing to support delivery of the Thames Tideway Tunnel
- RAPID (the Regulators’ Alliance for Progressing Infrastructure Development) develops and delivers strategic water resource solutions to enhance the underlying resilience of water supplies to protect customers and the environment
- Innovation is still crucial for sector’s ability to meet future challenges and we’ll be consulting on the future design and delivery of our Innovation Fund.
Affordability
We recognise that addressing climate change, environmental and resilience issues will require sustained investment at a time when customers are facing significant pressures on the cost of living and the water sector needs to do more to tackle this twin constraint.
We will use a range of tools to ensure water companies deliver affordability and value for money for current and future customers. This includes implementing our Paying Fair guidelines and publishing an analysis of companies’ additional support for customers.
Customer service and support
We will consult to update standards and reporting for companies’ priority services registers (PSR), which provides extra support for customers in vulnerable circumstances, and work with others to enhance PSR data sharing. We will monitor company support for customers who need extra help by reference to our new ‘Service for All’ guidelines, and through companies’ updated vulnerability strategies.
Improving the environment
We want water companies to tangibly deliver on protecting and improving the environment, including biodiversity, the health of our rivers, and address unacceptable levels of sewage discharges. We will continue to collaborate with the Environment Agency and Natural Resources Wales on a joined-up approach to monitoring and managing the delivery of the water industry national environment programme (WINEP) in England and national environment programme (NEP) in Wales.
Tell us what you think
We would welcome any comments on our proposed forward programme of work 2024-2025.
Please email them to [email protected] with the subject ‘Ofwat’s forward programme 2024-25 – draft for consultation’ or post them to:
Forward Programme Consultation response
Ofwat
Centre City Tower
7 Hill Street
Birmingham
B5 4UA
The closing date for this consultation is 5 pm on Friday 23 February 2024. We will publish our final forward programme of work by the end of March 2024.