Meeting the high hurdle to achieve a fast-track assessment
We submitted our business plan for the 2020–25 period in September 2018, and Ofwat published its initial assessment (IAP) on 31 January 2019, in which we were one of only three companies to achieve a fast-track assessment. This achievement reflects the transformation we have delivered in recent years as well as the quality of our plan.
Our plan received the highest overall grades for the sector, as can be seen in the table below. It was commended as high quality and industry-leading in many areas, including innovation, affordability and vulnerability, customer engagement, and resilience. We committed to deliver more for less for customers, with stretching service level targets alongside a significant bill reduction in real terms.
As part of the IAP, all three fast-track companies accepted targeted actions from Ofwat. There were areas of our plan where we were asked to commit to even more stretching targets, such as reducing leakage, a further 3 per cent reduction in total expenditure, and provide more information on our proposals. We will continue to work constructively with Ofwat through to our final determination in December 2019.
A fast-track assessment brings reputational, financial and procedural benefits. Most importantly, it gives us greater clarity earlier in the process, and we have committed a further £100 million investment in 2019/20 to make a flying start in delivering our plan.
Ofwat published its latest annual Company Monitoring Framework assessment, in which we retained the highest category of 'self-assurance'. We have achieved this three years in a row – the only company to do so – demonstrating the consistently high level of trust and confidence that customers and other stakeholders can have in the quality and transparency of our reporting.
rating received for our high quality and ambitious plan
for customers in real terms to 2025
additional investment in 2019/20 to facilitate a flying start to AMP7
Ofwat's assessment of company performance against key test areas
* Highest possible assessment for these test areas was B
Source: Ofwat, PR19 Initial assessment of plans: Summary of test area assessment
A = High-quality, ambitious and innovative plan with evidence that overall is sufficient and convincing
B = High-quality plan, not sufficiently ambitious and innovative to be exceptional with evidence that overall is sufficient and convincing
C = Concerns with the plan: Plan falls short of high quality and/or evidence is insufficient and/or unconvincing in some areas
D = Substantial concerns with the plan: Plan falls significantly short of required quality and/or little or no evidence, or no convincing evidence
3 Sept 2018
Submission of company business plans to Ofwat
31 Jan 2019
Publication of Ofwat’s initial assessment of company business plans
11 Apr 2019
Publication of draft determinations for fast-track companies
18 July 2019
Publication of draft determinations for slow-track and significant scrutiny companies, and update on Ofwat cost of capital assessment
11 Dec 2019
Publication of final determinations for all companies
Companies announce whether they accept their final determination
Start of AMP7 period
AMP7 Planning and preparation
AMP7 Delivery – Year 1 of 5
AMP6 Delivery – Year 4 of 5
AMP6 Delivery – Year 5 of 5