Our latest

Ofwat's PR19 final determinations

Ofwat's PR19 final determinations

Water companies today received the final determination from Ofwat on their business plans for price control period 2020-2025.

Ofwat awarded just three companies the prestigious ‘fast track’ status as part of their draft determinations earlier this year, with all other companies either awarded a ‘slow track’ or ‘significant scrutiny’ status.

Those water companies that were slow tracked or under significant scrutiny have today had the final report from Ofwat, who checked and challenged the plans, including how much companies planned to spend to deliver them.

What are the key elements of the determinations?

Ofwat broke down the key elements of the determinations into a core document which can be found on their website here.

The final determinations report sets out a £51 billion package over the five-year period, that will enable water companies to deliver for customers, invest for the future and operate more effectively.

The £51 billion package includes:

  • £469 million to address long term drought challenges
  • Reducing pollution incidents by £30 million
  • More than £1 billion to help protect from flooding
  • Improving more than 12,000 km of river
  • Helping customers cut water use by 13%
  • Cut leaks by 16%
  • Reduce mains bursts by 12%
  • Nearly 1.5 million customers getting support with bills; and
  • Average bills to fall by 12% after inflation

What does this mean for water companies?

The first step for those water companies that received their final determination today is to review Ofwat’s detailed responses to all areas of their PR19 plans.

Depending on companies’ perceptions of their determination, some may choose to challenge it, which would mean submitting their case to the Competition and Markets Authority (CMA) – companies now have eight weeks to decide and make clear their position.

For those who accept the determination, the challenge is turning their ambitious plans into reality and transforming their performance.

Ofwat’s chief executive, Rachel Fletcher said of the determinations: “Today we’re firing the starting gun on the transformation of the water industry backed by a major investment programme to deliver new, improved services for customers and the environment and resilience for generations to come.”

What is clear is that effective engagement with customers and stakeholders was important for Ofwat when reviewing each company’s evidence, and Ofwat’s most recent strategy tells us that engaging customers and giving them a clear voice in the development of strategies will continue to be vital in the coming price control period.

Why is Explain an ideal trusted partner?

The hard work is just getting started for those water companies who have their plans in place for 2020-2025. As experts in market research and engagement within the utilities sector, we are well placed to support you navigate the challenging and evolving regulatory landscape as you move towards PR24.

  • We are experts in working in regulated industries, including water, electricity and gas, and finance - we’ve worked in the water sector specifically for two decades.
  • As a Market Research Society (MRS) Company Partner, we work to their Code of Conduct. You can be confident our research will be impartial, open and focused on delivering robust insight.
  • Our partnership approach to working means we work as an extension of your team, to get under the skin of your objectives for each and every piece of research and create a bespoke solution.

Our team at Explain Market Research are experts at putting in place research programmes identify and support business planning priorities within the utilities sector.

Contact us today to find out how we could support you and get in touch with our team to understand more about the solutions we can provide - get in touch with the team on 0191 261 5261 or info@explainresearch.co.uk.