Joint Ofwat and Water UK Targeted Review of Common Performance Commitments

The targeted review will:

• Explain companies' current approaches to reporting on a number of the common performance commitments. • Highlight any areas where there are inconsistencies in approaches or calculations. • Develop consistent reporting requirements for those common performance commitments currently without them. • Provide more detail to support the consistent reporting requirements for those common performance commitments that currently have them. • Send a strong signal to stakeholders about the sector's collective commitment to common performance commitments that currently have them.

It is anticipated that the output of the review will be used to inform business decisions by companies and regulatory decisions by Ofwat. These decisions will directly affect the levels of service provided to all water and sewerage customers in England and Wales and have the potential to have financial impacts in the hundreds of millions £ sterling. There is the potential for these decisions, and the material on which they are based, to be subject to substantial challenge and scrutiny, for example by the Competition and Markets Authority or the Public Accounts Committee. The output of the review must therefore be robust to such challenge and scrutiny.

This work will be used by both Ofwat and Water UK. The scope of the work is expected to be limited to the approaches to the following common performance commitments:

1. Leakage 2. Per capita consumption or per household consumption 3. Supply interruptions 4. Internal sewer flooding 5. External sewer flooding 6. Sewer collapses 7. Mains bursts 8. Unplanned outages

A review of the scope following publication of the Ofwat PR19 methodology on 13 December 2017 will enable us to clarify which of per capita consumption or per household consumption will form part of the project. It may also result in one or more measures in this provisional list being dropped; it is possible, although less likely, that additional measures could be added. In the event that an adjustment of less or more measures is required, a revised quotation will be required and will be the basis on which the presentation will be based.

All costs including expenses are to be shared 50/50 between Ofwat and Water UK.