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UK water companies outline £50bn+ business plans for 2020-2025

All water companies across England and Wales have submitted business plans worth an estimated £50 billion-plus in total for the years 2020-2025 to water industry regulator Ofwat.

As part of Ofwat’s 2019 price review, all water companies must set out a detailed business plan outlining how they will meet the needs of their customers from 2020 to 2025 and beyond.

The plans cover a range of matters including:

  • what companies propose to invest
  • what they propose to charge customers
  • how they will support vulnerable customers
  • how they will ensure the long-term resilience of their infrastructure and operations.

The regulator will now scrutinise all of the business plans before publishing an initial assessment of each company’s plan on 31 January 2019, where it will categorise companies’ plans according to the level of quality, ambition and innovation they have demonstrated. The categories will be: exceptional, fast-track, slow-track and significant scrutiny.

The best plans could benefit from incentives through the price review process, while those that fall short will face closer scrutiny and interventions and could receive lower returns.

Both exceptional and fast-track business plans will benefit from procedural and financial incentives,.

The water sector regulator will make final decisions on the services water companies must deliver and limits on the prices they can charge customers in December 2019.

Ofwat Senior Director for Strategy & Planning, John Russell, said:

“We’ve reached a key milestone in our price review process. From now until January 2019, we’ll pore over each and every business plan and we’ll be looking for evidence that they are robust, ambitious and, crucially, that they have been shaped by customers.

All companies have had an opportunity to develop high-quality plans, but where plans aren’t sufficiently ambitious or stretching, we’ll step in to protect customers and the environment.”

In March/April 2019, Ofwat will publish draft determinations for companies with exceptional & fast track plans

By April 2019, companies categorised as either significant scrutiny or slow track must submit revisions to their business plans addressing the shortcomings Ofwat has identified

In July 2019 Ofwat will publish draft determinations for companies categorised as either slow track or significant scrutiny

In December 2019 Ofwat will publish final determinations for all companies.

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