Ofwat has set out its early ambitions for the 2024 price review – sharing ideas on how the sector can meet the challenges it faces to deliver into the future.
The water regulator is seeking to move the conversation forward around four goals for PR24:
- Increasing focus on the long term: The price review needs to deliver the right long-term solutions for customers. Companies should place their business plans clearly in the context of their long-term ambitions, and Ofwat has announced it will explore how to give greater regulatory clarity about what will happen in future price reviews.
- Greater environmental and social value: Water companies should be ‘key players in their communities.’ According to Ofwat, there’s a need to incentivise sustainable outcomes and behaviours that deliver the most value, whether it be collaborating with local partners or working innovatively with customers and communities.
- Clearer understanding of customers and communities: There’s a need for ‘a simpler, more targeted and more effective’ approach to capturing customers’ views. Ofwat plans to work with the sector to conduct collaborative customer research, to complement companies’ own work with their customers
- Delivering improvements through efficiency and innovation: According to Ofwat, companies need to operate efficiently to create space to do more for their customers and the environment. The price review needs to drive improvements from innovative approaches and embracing open data.
David Black, Interim Chief Executive at Ofwat, commented: “We want the price review to drive the change needed to meet the demands from climate change, customers’ rising expectations, and affordability concerns.
“We think that the sector can deliver more for customers, society and the environment, but we all need to work differently to unleash this potential.
“Collaborating with others inside and outside the sector can deliver better, more sustainable outcomes.
“We’re sharing ideas now to explore with others how the price review can make a difference for customers and the environment, into the future.”
Ofwat is inviting comments on a paper outlines their initial views on the framework for PR24 and future price reviews by 5pm on 22 July.
This will help the regulator further develop the price review framework in advance of their draft methodology, due in summer 2022.
More information about this document is available on the Ofwat website.