NEA welcomes the opportunity to respond to the consultation on Ofwat’s draft methodology for PR24.
Our response outlines the following ten recommendations:
- Ofwat should reaffirm the importance of the work across affordability and vulnerability and reconsider including affordability and vulnerability as an additional theme to this price review.
- Ofwat should require all areas of business plans to have a full impact assessment undertaken showing the impacts on customer bills, including those struggling, or at risk of struggling, to pay.
- Ofwat should support the introduction of a customer-focused licence condition with the introduction of a vulnerability strategy.
- Ofwat should reconsider their position on the actions that companies should take regarding a single social tariff, considering how this could be done within the current legislative and regulatory frameworks.
- Ofwat should introduce a dedicated fund which companies can use for programmes focused on consumer vulnerability and water efficiency.
- Ofwat should introduce a requirement for companies to assess the impact(s) of all innovation projects on households in vulnerable circumstances.
- Ofwat should use the price control to confirm an industry measure of water poverty and create a reputational incentive that requires companies to submit an annual return on the levels of water poverty in their area under an agreed methodology.
- Ofwat should reconsider the removal of ODIs/PCs for vulnerability and affordability, and consider introducing the following requirements:
- Companies to report on PSR recruitment as a direct result of their own activities
- Companies to report on an additional measure of experience, which specifically surveys customers on the PSR
- Companies to report on the reduction of debt in situations of severe indebtedness
- Companies to report reductions in the levels of water poverty in their operating areas
- Companies to report on the number of value-adding conversations they have with defaulting customers.
- Ofwat should introduce a performance reporting mechanism, which consistently publishes performance metrics on affordability and vulnerability on an annual basis.
- Ofwat should place a requirement on NAVs to submit plans for improving affordability support.
- Ofwat should include the impact assessment required under recommendation two in the required evidence to assess ambition for affordability.