Our response to Ofwat’s PR24 consultation on changes to Price Control Deliverables (PCDs)
We welcome the opportunity to respond to Ofwat’s consultation on changes to PR24 Price Control Deliverables (PCDs).
Our comments reflect the perspective of customers, who are being asked to pay significantly more on their bills between 2025-30 to fund large-scale improvements. Customers want clear commitments, confidence that money will be spent wisely, and strong protection if companies fall short.
In this context, we support Ofwat’s intention to strengthen the framework for PCDs, but urge you to:
- Keep customer protection at the heart of your approach.
- Ensure penalties are strong enough to prevent delay.
- Require transparency and independent assurance at every stage.
Overall, we agree with Ofwat’s approach to refining guidance, but urge Ofwat to go further on clarity, transparency, and independent verification. This is the only way to give customers confidence that the billions they are paying will translate into real improvements.
No. If customers’ bills are rising to fund improvements, those improvements must be delivered in full and on time. Customers should never be in the position of paying for upgrades that arrive years late or not at all.
We recognise the proposal to allow companies that have spent at least 70% of funds by 2030 to carry deliverables into the next period. However, this is difficult to justify from a customer perspective as spending money is not the same as delivering outcomes. If a company cannot meet its commitments, customers would expect:
- Full transparency on what has been delivered and what has not.
- Automatic clawback of funds for undelivered outputs, with no risk that customers pay twice.
- Strong late delivery penalties so that companies are always worse off for delaying.
Yes, but we would like greater assurance and transparency for customers. We understand that unforeseen changes will arise, and where outputs are loosely defined or investigative, customers would welcome Ofwat’s intention to tighten guidance. Vague commitments are hard for the public to understand and harder still to hold companies to account against.
But customers need assurance that unforeseen changes are genuine and not excuses for under-delivery. Any approved change should:
- Be backed by clear evidence and independent assurance.
- Deliver outcomes of equal or greater benefit to customers and the environment.
Limiting changes only when they are greater than 0.5% of the allowed totex may risk overlooking smaller changes that may still matter to customers. Smaller changes should be open to scrutiny where they alter customers’ benefits and/or environmental outcomes.
Customers are particularly concerned about sewage pollution. We support flexibility in how storm overflow improvements are achieved (such as by using wetlands or treatment upgrades), but only where:
- Outcomes are as good as the original commitment.
- Companies provide robust evidence, independently verified.
- There is no risk that customers pay for work already required by existing permits.
Ofwat’s proposals are a step in the right direction but fall short of what customers will need.
While non-delivery clawbacks and cost sharing provides some protection, clawback is not always automatic or comprehensive, and the cost sharing rates may still allow companies to retain benefits from inefficient spending. This is because under Ofwat’s cost-sharing rules, if they overspend against their allowance only a portion of that overspend is borne by the company, the rest is passed to customers.
Customers should not bear the cost of undelivered comments or inefficient company spending. CCW supports automatic full clawback for non-delivery and a stronger cost-sharing framework that ensures genuine efficiency gains are shared with customers.
We support Ofwat providing additional guidance where it’s needed, but from a customer perspective the priority is to ensure clarity, transparency, and strong assurance.
As per our response to question 3, customers are concerned about sewage pollution, so the extra guidance on evidence, assurance, and equivalent storage is welcome. However, allowing flexibility with solutions (such as wetlands or treatment upgrades) must not dilute commitments. Customers must be protected from double-paying for work already required by permits. Outcomes should be independently verified and reported in plain, accessible terms.
With the Industrial Emissions Directive PCD, we recognise that rationalising sludge treatment into fewer, larger hubs may offer efficiencies, but this must never come at the expense of resilience or environmental outcomes.
Customers should not carry an unfair share of the risk for cost overruns. Independent assurance is needed so that these changes are not simply cost-cutting measures.
Any reconfiguration should only proceed if it has been agreed with the Environment Agency/Natural Resources Wales and can be shown to deliver at least the same, if not better, environmental protection. Where sites are closed, customers should expect clear, transparent plans for safe decommissioning to avoid hidden risks or costs in the future.