SERVICEABILITY METHODOLOGIES (Report Ref. No. 12/RG/01/4)

Mott MacDonald was appointed by UK Water Industry Research to undertake a review of Ofwat’s serviceability methodologies. This Final Report reviews the existing approach to serviceability, the approaches used in other comparator sectors and jurisdictions, and the potential impact of future changes to the regulatory environment. The report then considers the implications of the findings of these reviews and sets out proposals for further developing a self-assessment approach to serviceability for Ofwat to consider as part of its future regulation programme. The proposals build on the approach to serviceability that has been developed over the last three AMPs and seek to create a much stronger link between service risk analysis undertaken under the Capital Maintenance Planning Common Framework (CMPCF) and serviceability outputs used for monitoring.

At the time of writing substantial parts of the future regulatory framework in England and Wales remain uncertain as Ofwat’s future regulation programme has yet to reach final conclusions in many areas. Nevertheless in making recommendations account has been taken of the thinking that Ofwat has published, particularly under its Future Price Limits and Regulatory Compliance projects.