Ofwat sets out its ambition for PR24
Ofwat yesterday 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 pace and scale of change is going to be quicker and greater than ever before. To meet the challenges this presents and embrace the opportunities, Ofwat is moving the conversation forward around four ambitious 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 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. We 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 – we need 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 – 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.
The water sector faces profound challenges and needs to work in new ways to deliver greater value for society and to reduce costs – this is the moment for fresh thinking and real change.
We all have a role to play in delivering these ambitions and, for Ofwat, this means continuing the conversations that started last year and turning ideas into action. Ofwat’s promotion of debate and discussion through its ‘Future Ideas Lab’ has led to positive suggestions on how Ofwat can support collaboration across the sector and empower companies to deliver the best outcomes for customers and the environment.
Ofwat will continue to listen and work collaboratively with customers, companies, other regulators and those with a wider interest in the sector. The aim is to design a price review fit for the future.
David Black, Interim Chief Executive at Ofwat yesterday said:
‘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.’
Notes to Editors:
- PR24 Launch document
- We welcome responses to this document by email at: PR24@ofwat.gov.uk and will carry on the discussion through working papers, workshops and working groups. This will help us further develop the price review framework in advance of our draft methodology, due in summer 2022
- You can continue to let us know your views via our Future Ideas Lab.
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