NEA’s response to open consultation on Ofwat’s draft methodology for PR24

NEA welcomes the opportunity to respond to the consultation on Ofwat’s draft methodology for PR24.

Our response outlines the following ten recommendations:

1. 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.
2. 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.
3. Ofwat should support the introduction of a customer-focused licence condition with the introduction of a vulnerability strategy.
4. 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.
5. Ofwat should introduce a dedicated fund which companies can use for programmes focused on consumer vulnerability and water efficiency.
6. Ofwat should introduce a requirement for companies to assess the impact(s) of all innovation projects on households in vulnerable circumstances.
7. 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.
8. Ofwat should reconsider the removal of ODIs/PCs for vulnerability and affordability, and consider introducing the following requirements:
   1. Companies to report on PSR recruitment as a direct result of their own activities
   2. Companies to report on an additional measure of experience, which specifically surveys customers on the PSR
   3. Companies to report on the reduction of debt in situations of severe indebtedness
   4. Companies to report reductions in the levels of water poverty in their operating areas
   5. Companies to report on the number of value-adding conversations they have with defaulting customers.
9. Ofwat should introduce a performance reporting mechanism, which consistently publishes performance metrics on affordability and vulnerability on an annual basis.
10. Ofwat should place a requirement on NAVs to submit plans for improving affordability support.
11. Ofwat should include the impact assessment required under recommendation two in the required evidence to assess ambition for affordability.