Ofwat has confirmed it is considering appointing an Independent Monitor to monitor and report on Thames Water’s progress, including against its transformation plan.
The Independent Monitor would report back to Ofwat and be entitled to full access of company information.
This follows the decision by Ofwat to allow Thames Water £16.9bn to invest on improving services for customers and the environment, as part the Price Review 2024 (PR24), despite the water company’s current financial difficulties.
The Price Review, performed every five years, enables Ofwat to set the price, investment and service package for water companies in England and Wales. PR24 covers the period from 1 April 2025 to 31 March 2030.
Around 20% of the £16.9bn funding (worth more than £3bn) is conditional on the company demonstrating it is ready and able to effectively deploy investment or that the investment will be effectively and efficiently targeted. This is in addition to the price review process that will see customers’ money clawed back if investment is not delivered.
Given concerns about the performance of the company, Ofwat is imposing a Turnaround Oversight Regime on the company. This will include:
- a requirement to provide a ‘delivery action plan’ which sets out the actions the company proposes to take to expand its delivery capacity. The company must report on its progress regularly, subject to review and additional scrutiny by an independent third-party assurance provider
- a requirement for the company to fully re-evaluate its plans for transformation in order to demonstrate how it will deliver the necessary step change in operational performance
- a requirement for the company to provide a financial resilience plan in response to the draft determinations. Ofwat will continue to monitor and engage with the company on its financial resilience
