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  • by Karma Loveday

Codes Panel voting mechanism altered to boost market change efficiency

The way in which proposed changes to the market codes are accepted or rejected by the Panel has been changed.

On 23 August, Ofwat implemented a new voting mechanism. From now on, a "Simple Majority plus one" method will be used, meaning decisions will be passed if the majority of panel members, plus one, are in favour or against a proposal to amend either the Market Arrangements Code or the Wholesale Retail Code. Abstentions will not be counted as votes.

This replaces the arrangements where either a unanimous decision or a ‘Qualifying Majority’ was needed to make a decision. A Qualifying Majority is defined as not less than ten out of up to 12 voting Panel members (excluding the chair). There were also provisions for circumstances where the Panel is quorate, but a Qualifying Majority cannot be reached: then a vote is required to be unanimous to pass, and abstentions do not count as votes.

A sub group of the Panel recommended the change be made to address issues with the efficiency of the change process. It argued the bar for the Qualifying Majority voting mechanism is high, and, in contrast, it found the bar can also be very low in some circumstances – for example, a decision could pass where eight Panel members abstain from voting but the remaining four unanimously agree on the decision.

The sub group’s report included examples of instances where the Panel has been unable to make a decision, and where a proposal has been rejected despite a large majority of voting Panel Members being in favour of it.

Qualifying Majority voting will be retained for determinations to remove a Panel member.

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