Market Performance Framework Reform
The Market Performance Framework (MPF) helps us understand and influence how the business retail market is performing.
It includes components that help us:
- Focus on the key activities that deliver the best outcomes for customers
- Agree minimum performance targets for those activities - and how we measure them
- Assess how trading parties are performing those activities, and against their peers
- Take steps to intervene where necessary, which may be in the form of additional audits or charges (financial penalties)
This short, 3-minute animation explains the purpose of the MPF and provides a high-level overview of the reform programme and changes that have been made.
For more detailed guidance, please see the 'Trading party performance' section.
A Water Report feature on the programme, published in December 2025, is available here (reproduced with permission).
Road to reform
A review of the market by Ofwat in 2020/21 concluded that the MPF was too complicated, poorly linked to customer outcomes - its primary purpose - and that the current incentives were too low to drive changes in trading party performance.
In response, the Strategic Panel asked MOSL to carry out a 'root and branch' reform of the MPF with the aim of making it simpler and more effective. The programme became a key priority in MOSL's 2023-26 Business Plan.
Working closely with trading parties and other stakeholders including Ofwat and CCW, the MOSL-led programme went back to first principles to consider which activities should be monitored and how they should be incentivised.
The programme encompassed changes to the governance arrangements of the MPF, non-financial tools such as assurance and audits, and financial tools such as performance standards and charges.
Following a series of market-wide consultations (see below), the reformed MPF now focuses on three key areas:
- The timely reading of customers' meters
- The quality of customer and premises data
- The delivery of bilateral service requests - i.e. retailers' requests to wholesalers to carry out a particular activity, such as locating or replacing a faulty water meter.
Consultations
MOSL has worked closely with subject matter experts on the Performance Advisory Group (PAG) to help develop, shape and challenge proposals. The PAG includes representatives from retailers and wholesalers, Ofwat and CCW.
The proposals have then been developed into draft code change proposals for consideration by the Code Change Committee, which makes its recommendations to Ofwat.
In addition, the programme has involved extensive engagement with stakeholders via a series of consultations:
- Consultation 1 (October 2022) considered all possible risks, issues and activities of a future MPF
- Consultation 2 (March 2023) produced a 'longlist' of around 40 potential activities and considered more than 100 potential metrics
- Consultation 3 (October 2023) proposed a shortlist of 9 activities, 21 KPIs, 8 intervention tools and 4 levels of governance
- Consultation 4 (July/Aug 2024) considered the design and principles of the financial tools and incentives.
- Consultation 5 (February 2025) proposed performance standards and charges for the market's priority metrics (KPIs)
Launch
Prior to the launch of the reformed MPF, MOSL ran a 'shadow period' from May to November 2025, during which time trading parties could see their performance against the new framework ahead of the new KPIs coming into effect.
Following the unanimous recommendation of the proposed codes by the Code Change Committee and subsequent approval by Ofwat, five new KPIs went live on 1 December 2025, each with associated performance standards and charges:
- Three KPIs relating to cyclic (regular) meter reads
- Two KPIs relating to the reading of meters when a customer is transfering to a new retailer.
The five KPIs join three metrics that are charged under Ofwat's 'Business Customer and Retailer Measure of Experience' (BR-MeX), which went live in April 2025.
Looking ahead
For trading parties, however, the launch of the new KPIs effectively represented the launch of the new MPF. The first performance reports under the new arrangements are due to be published on 23 January 2026.
Two further parts of the programme are due to be delivered by April 2026: Additional Metrics and Market Indicators, which the Performance Assurance Committee will use to provide insights into the performance of trading parties and the market; and the 'Core Service Model', which will help determine how the MPF adapts over time.