The Strategic Panel has decided to delay the next round of the Market Improvement Fund (MIF), deferring a decision on opening Round 5 until October 2026.
The decision follows an updated forecast of the funding available for Round 5, including from charges under the reformed Market Performance Framework. The forecast indicates that current funding available would be significantly lower than previous rounds. This could materially limit the scale, ambition and potential impact of projects that could be supported if the round were to proceed in 2026.
The Market Improvement Fund was established in 2021 to support projects that improve the functioning of the business retail water market and deliver benefits for business customers. To date, more than £2.7 million has been allocated across four completed rounds, supporting a mix of data‑led studies, exploratory work and practical solution‑testing initiatives.
By deferring the decision on Round 5, the Strategic Panel intends to allow performance charge funds to accumulate, restoring the ability to support a small number of well‑scoped, impactful projects at a scale more consistent with previous rounds. The deferral will also provide greater certainty on future funding levels and enable learning from existing projects to inform the design and priorities of any future round.
During the deferral period, the Panel will retain the ability to identify and fund specific priority projects on a needs‑led basis, using its powers under section 9.6 of the Market Arrangements Code.
Rick Hill, Independent member of Strategic Panel and sponsor of the Market Improvement Fund said:
“The Market Improvement Fund has been most effective when it has been able to support projects with the scale and ambition needed to deliver tangible market benefits. Given the current funding outlook, deferring a decision on Round 5 allows us to preserve the integrity of the Fund and ensure that future projects can deliver meaningful impact for business customers.”
Further updates on timing and next steps will be shared following the Strategic Panel’s consideration later in 2026.
