Governance Review Consultations
In Autumn 2020, the Panel commissioned Satori Board Review to review its effectiveness. Satori’s findings and recommendations were presented to and accepted by the Panel in February 2021. Satori noted that the Panel had been established as a transactional body to assess changes to the market codes. Whilst many of these changes have been proposed by sub-committees of the Panel, some stakeholders expected the Panel to take a more strategic and proactive role in developing the market for the benefit of customers. These different expectations lead to varied perceptions of the Panel’s effectiveness.
Satori proposed 42 recommendations encompassing a strategic roadmap and a service roadmap. This consultation is part of the strategic roadmap which comprises three elements:
Review and redefine the purpose of the Panel
Design the Panel composition to ensure it has the requisite skills, knowledge, and resource to deliver its purpose.
Refresh the principles that underlie market changes to ensure alignment with strategic aims.
Links to consultations covering these areas are below. Stakeholders are advised to review the consultation overview and then the discussion document/consultation note and supporting documents for each consultation and respond using the online forms. The consultation was opened on 24 May with an original deadline of Monday 14 June 2021. After consultation with Ofwat and the Panel this has been extended to Friday 18 June 2021.
The Panel approved a discussion document on Panel purpose at its April 2021 meeting. This document was compiled in consultation with Panel members, its committees, and senior stakeholders including Ofwat, Defra, Consumer Council for Water (CCW) and MOSL. The document discusses why the industry has a panel, what responsibilities it should have and criteria for assessing Panel design and decision making. Examples of different panel models are also presented which are reflected in the consultation on Panel composition.
Stakeholders are invited to respond to questions on Panel purpose that are posed in the discussion document. These responses will be used to inform Panel and Ofwat thinking on panel purpose.
The Panel has received two code change proposals relating to Panel composition. CPM021: Panel Membership and voting rights was proposed by Castle Water in November 2019 and seeks to improve industry engagement in the Panel. CPM039: Revisions to the Panel Composition was proposed by Ofwat in April 2021 and seeks to fill the perceived gap in the industry to operationalise market strategy developed by Ofwat and Defra. The Panel commissioned the governance sub-group to develop these two change proposals. The sub-group has worked with the proposers to develop models based on a combination of the example models in the Panel purpose discussion document. Both models propose a strategic panel to actualise market strategy set by Ofwat and Defra and a dedicated sub-committee to manage day to day change. Note that different solutions are proposed for CPM021 and CPM039 which are mutually exclusive, i.e. only one proposal can be approved by Ofwat.
Stakeholders are invited to respond to the questions posed in the consultation on Panel composition. Responses to this consultation and feedback on the Panel purpose discussion document will be considered by the proposers of the two changes and the governance sub-group before the final solutions are proposed to the Panel and Ofwat.
The Panel has received one code change proposal relating to code principles. CPW121/CPM040 MAC and WRC Principles was proposed by Ofwat in April 2021 and seeks to review the principles in the Market Arrangements Code and the Wholesale-Retail Code that underlie Panel decision making. The Panel also commissioned the governance sub-group to develop this change proposal. The sub-group has worked with the proposer to develop a proposed set of principles, and potential variants for consideration.
Stakeholders are invited to respond to the questions posed in the consultation on code principles. Responses will be considered by the proposer and the governance sub-group before the final solution(s) are proposed to the Panel and Ofwat.
We are currently consulting with industry on the proposals. Recognising the size, complexity and impact of the proposals, we have extended the consultation period until 18 June.