Ofwat moves to ongoing financial resilience monitoring of retailers

Ofwat has told non-household market water retailers that it will monitor their financial resilience on an ongoing basis.

In a letter, the regulator said this would entail additinal reporting and informatin on corporate structures.

Supplementary reporting as part of existing Certificate of Adequacy (CoA) requirements

These certificates are to confirm retailers have the management, financial, technical, operational, and other resources required to meet their licence obligations. However Ofwat said: “A review of the information required as part of the CoA process highlighted shortcomings in the accuracy, and therefore reliability, of some of these self-assurance statements.” It will increase its scrutiny of CoA submissions and proactively challenge retailers where it has concerns that they may be unable to satisfy the obligations of their licence.

Requiring information on corporate structures and governance every two years.

Should inconsistencies surface, Ofwat will engage with retailers to understand these and any associated risk.