On 30 July, Ofwat announced its decision on the changes developed by the Governance Sub-group that formed part of the Market Governance Review and recent consultation.
These changes reflect the decision to amend the Panel's purpose, composition and code principles. Ofwat has approved the following changes, both of which will be implemented on 1 September 2021:
This change sets out the new governance arrangements for the market and introduces two new bodies to replace the existing Panel; a Strategic Panel responsible for implementing the strategic direction set out by Ofwat and Defra, and a Code Change Committee with the delegated function to assess and recommend code changes.
This change will replace the existing Market Arrangements Code (MAC) and Wholesale Retail Code (WRC) Principles with a more focused set of code principles that reflect desired market outcomes.
In approving these changes, Ofwat rejected the alternative solutions - CPM039 and CPW124: ‘Revisions to Panel Composition (alternative)’ and CPM021 and CPW125: ‘Panel Membership and Voting Rights’.
Next steps
To ensure the Strategic Panel and Code Change Committee have the right balance of skills and experience, members will be appointed following a selection process.
The Strategic Panel will be appointed by a Panel Nomination Committee, comprising Ofwat, Defra and MOSL. The nomination committee will be established in August, with its first task to appoint the Strategic Panel Chair. The Chair will then join the committee in the selection of the remaining members of the Strategic Panel. Wholesaler and retailer members will be selected from candidates nominated by the industry.
Once members of the Strategic Panel have been appointed, the Panel will appoint members of the Code Change Committee. Whilst the new governance arrangements will be implemented from 1 September, there will be a period of transition during which the Strategic Panel and Code Change committee will be formed. The current Panel will continue to operate and manage code changes under existing processes.
Full details and the timetable for the selection process is currently being considered by the Panel Nomination Committee. Further information can be found on the MOSL website.
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