PR14 marked a new regulatory approach for the water sector. We set out a framework that encouraged companies to proactively engage with customers, and to focus on delivering the services that matter most to customers and the environment in the most efficient way.
As the PR14 period ended we wanted to review the impact it has had on the sector. This reflects our ambition to increase our focus on ex-post analysis and evaluation of our policies in order to increase our future impact. This review will, in particular, help us to improve the design of the 2024 price review (PR24) and other future price reviews.
We published ’Reflections on the price review’ shortly after PR14 final determinations which set out sector views on the PR14 process. We do not intend to duplicate those findings, but rather to focus on what can be learnt from the PR14 period itself. We would like to evaluate if the key elements of PR14:
- achieved their original objectives;
- resulted in any unintended effects (positive or negative); and,
- could be made more effective in future price reviews.
We have drawn on existing publications, some of which already informed our approach to the 2019 price review (PR19). In addition, we have considered data such as the annual performance report (APR) data submitted throughout the PR14 period.
However, we also wanted to capture wider views and experiences of the PR14 period, along with any supporting evidence, through our call for input on PR14, published on 4 December 2020.
On 11 August 2021, we published our PR14 Review: Discussion paper on findings for review, which takes a ‘deep-dive’ look at how prices and service levels changed during the 2015-20 period, and how PR14 helped achieve these outcomes.
Six companies responded to our discussion paper. Since then, we have considered each response carefully, and have reflected our views on the challenges raised by each company in the final PR14 Review.
As a regulator, we remain committed to regularly reviewing the effectiveness of our regulatory regime to ensure it delivers good outcomes for customers, communities and the environment. This report is an important part of that work, therefore we are grateful to all parties that provided input for this review.