At PR14, Ofwat introduced an outcomes-based framework, which involved extensive customer engagement and companies setting their own outcomes, measures, targets and incentives alongside challenge from Customer Challenge Groups (CCGs). Overall, the PR14 framework has been viewed as a success as it is considered to be a truly innovative approach, and other regulators are considering how it could be incorporated into other sectors.

As the outcomes-based framework was a new approach at PR14, Ofwat’s ambition is now to build on the lessons learned from PR14 to refine the outcomes framework for PR19. As part of the Water 2020 publications Ofwat has identified a number of ways in which the PR19 framework could be developed, and recently Ofwat has published a specific consultation on the PR19 outcomes framework, “the outcomes consultation”. While the outcomes consultation indicates Ofwat’s potential approach to outcomes, measures and common targets, it does not provide detail on how PCs and ODIs may be set at PR19.

The aim of this project is to help Ofwat develop the PR19 methodology and the expectations that it will set for companies. The output from this project will enable Ofwat to make a confident choice regarding its methodology for PR19.