Ofwat to shine a light on AMP8 delivery through new assessment framework

(by Karma Loveday)

Ofwat is consulting until 18 June on a monitoring and assessment framework to hold companies to account on their delivery against unprecedented levels of AMP8 investment.

This will track each company’s progress against its delivery plan. These cover key items of expenditure 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 framework set out expected delivery profiles for the period, based on delivery plan baselines, showing when companies plan to carry out work and spend money across the five-year period. It will use delivery plan metrics to identify delivery risk early, and how companies are addressing any risk. This will both bring accountability and enable intervention if needed, which Ofwat said could range from more frequent reporting and formal engagement to enforcement action. Ofwat noted that the approach is underpinned by a supervisory approach that supports company-specific oversight.

An Ofwat spokesperson said: “Transparency is key: companies publish their delivery plans, and we will publish our assessments of their plans, so progress and delivery risks are visible to all.

“We are working hand-in-hand with regulatory partners to maintain a shared view of risk across the system, so that the unprecedented investment translates into real, long-term outcomes for customers, communities and the environment, while supporting long-term economic growth.”

The final framework will be published in summer, and Ofwat’s first view of delivery progress and emerging risks in the autumn.