Ofwat may assess delivery capability as part of first report on AMP8 progress

(by Karma Loveday)

Ofwat has finalised its PR24 Delivery Plan Assessment Framework, following May’s consultation.

This will hold companies to account on their delivery against unprecedented levels of AMP8 investment, by tracking each company’s progress against its delivery plan. These cover key items of expenditure covered by Price Control Deliverables, including on storm overflow capacity, nutrient removal work, the smart meter rollout, mains replacement and supply interconnection. In total this work is valued at around £38bn over the AMP.

The regulator said stakeholders were broadly supportive of its May proposals, and the final document responded to key items of consultation feedback, including: 

• How ‘in the round’ assessment will be made.

• How back-end loaded profiles will be recognised, and planned delivery timelines distinguished from actual delivery risks.

• How underspend will be treated.

Ofwat also set out its intention to develop, in draft form by the end of the year, a Delivery Capability Assessment Framework (DCAF) – a tool that will help to identify the root cause of any delivery issues, and the actions required to address them. Ofwat said this will be made available to companies to use voluntarily, and could be used under the supervisory approach where there are concerns about a company’s delivery plan or wider delivery capability. Furthermore: “To enable us to form a view of where the sector is in terms of delivery capabilities, we will consider whether applying the DCAF to all companies as a one-off exercise would be appropriate as part of our assessment of August 2026 delivery plan reports.”

Ofwat will publish its first assessment of AMP8 progress against the framework in December.