Ofwat consults on two-tier New Appointments and Variations reporting

Ofwat is consulting until 26 April on introducing a new two-tier reporting system for New Appointments and Variations (NAVs).

At present, new appointees submit a "small company return" the threshold for which is £10.2m annual turnover. This covers information about the financial positions and levels of service delivered. NAVs will be required to publish these for the first time for 2020-21, in July 2021 following a November 2020 decision.

Due to rapid growth in the market, two new appointees are expected to pass the threshold taking them into full reporting requirements (as for incumbent companies). Ofwat said this is “unlikely to be appropriate or proportionate”.

It is consulting on scrapping the £10.2m threshold for full reporting, and specifying instead that small company reporting requirements will apply to all companies where condition B of their licence is suspended (which is currently the case for all new appointees). Alongside that, it is considering introducing a new £5m turnover threshold, with lighter reporting requirements for the smaller firms and more extensive requirements for the larger firms.

From an average of three to four per year over 1997 to 2007, Ofwat granted 28 new appointments or variations in 2018, 53 in 2019 and 71 in 2020. As of 31 March 2020, there were eight new appointees serving 97 sites with a total of around 42,000 residential properties and 1,000 business properties.This equates to around 100,000 individuals being served by new appointees in England and Wales.

Ofwat said if it proceeds as planned, Independent Water Networks and Leep Water Networks would be subject to the more extensive reporting required in tier 2, while Albion Eco, Albion Water, County Water, Icosa Water, Severn Trent Connect and Veolia Water Projects would be in tier 1.