Review of Ofwat's New Appointments and Variations (NAV) Financial Viability Assessment

Overview

Awarded contract following further-competition against the Government Commercial Agency (GCA) RM6309 Management Consultancy Framework Four (MCF4) - Lot 4: Finance. NAVs are water undertakers with a range of long-term responsibilities to customers and the environment. Ofwat has a duty to secure that water companies can (in particular through securing reasonable returns on their capital) finance the proper carrying out of their statutory functions. In licensing new NAV sites, we fulfil this duty by carrying out a financial viability assessment. We want a consultancy to review the effectiveness of our approach to assessing NAVs' financial viability and to recommend if, and how, our approach could be changed in the future. We want to improve the way we assess financial viability - which we also see as important for protecting customers and the environment - and, by communicating this, give applicants for NAV sites greater understanding of the requirements, thereby reducing the complexity and duration of the licensing application process. As NAV sites have matured and continue to grow in number, and more data has become available, we now see this as an appropriate time for such a review, with the overall aim of improving the financial viability of existing and new NAV sites.