‘Covid vacant’ flag use extended until the end of July

Ofwat has extended the period in which retailers can use the ‘Covid vacant’ flag in the non household market by a month until the end of July.

The flag was put in place on 30 March and initially ran until 30 June. It had the aim of ensuring future primary charges reflect actual levels of (reduced) business consumption during the Covid-19 pandemic. Following consultation, Ofwat has extended the use of the flag until 31 July. It noted the lockdown is easing with non essential shops able to reopen since 15 June, but said normal trading was unlikely to resume immediately and there may be future local lockdowns. Moreover, that the new deadline aligned with its liquidity support provisions, which also run until the end of July.

Ofwat said: “We encourage retailers to use the period of this extension to review their customer portfolios and update the status of any business premises where the requirements for a temporary vacant flag no longer apply.”

In terms of next steps, the regulator said it would consult with trading parties in July on both the liquidity measures and further use of the Covid vacant flag. It noted the latter would include consideration of the timescale and process for unwinding the use of the flag and added: “Retailers should be aware that as part of our July consultation we may consider if retailers should be required to switch off all Covid-19 temporary vacant flags by the end of August 2020.”

The flag can be applied to non household premises that are either not open or have seen a 95% decrease in usual activities.