Ofwat confirms more work on financial resilience planned for 2025

In its draft forward work programme for 2025-2026, Ofwat confirmed it wants to do more on financial resilience. It said it will maintain its detailed monitoring of companies, engaging closely with those that need to take steps to address weaknesses in their financial resilience or which have significant equity to raise to support investment over the next period.

It added that, in deciding to pay and declare a dividend, company boards must take account of service delivered for customers and the environment, alongside the investment needs and the financial resilience of the company.

Ofwat will continue to report its views on companies’ financial resilience in the Monitoring Financial Resilience report later in the year. It highlighted however that, “as noted in our PR24 final determinations, while we decided not to take forward proposals restricting the payment of dividends linked to gearing levels, there are benefits from considering separately the regulatory protections in place to protect customers from the consequences of weak financial resilience. We will take this work forward in 2025.”

• The wider draft forward work programme identifies three strategic priorities for 2025-26: delivering for customers and the environment; enabling growth and addressing long-term challenges; and holding water companies to account. The consultation runs until 28 February.