The February 2006 Ofwat letter MD212 entitled Asset Management Planning to Maintain Serviceability sets out the England and Welsh water industry financial regulator's expectations for sewerage services in England and Wales. In particularly these expectations relate to providing value for money for customers and reflecting their views and priorities.  One of the key difference between this and earlier guidance is the recommendation that sewerage utilities should apply economic, risk-based analysis to their day-to-day business decisions. The analysis needs to be across asset types and between capital and operational interventions.

In 2006 Ofwat undertook a public consultation on three themes:

  • Sustainable development;
  • What period shoud the next price review cover; and
  • How to assess capital maintenance and long-term asset management.

The response is presented in "A sustainable water industry - to PR09 and beyond" - published in October 2006, and recognises that there is an overlap in the responses to all three topics. In the response, the need for long-term, integrated planning is recognised and 25 year business plans and sewerage plans will probably required for PR09. Holistic (not purely financial but including social and environmental factors) cost-benefit analysis is identified as having a key role in the delivery of value and sustainability, at both the strategic and programme level. Risk-based strategies focus sing on delivering best value will be encourage.

The Capital Maintenance Planning Common Framework (CMPCF) is now in use across the UK water industry and its application has recently been reviewed by UKWIR. In particular the new SRM has been designed so it could be used implement and complement the CMPCF. In particular the SRM provides clear, easy to use guidance defining best practice standards and approaches to assess drivers identified in the CMPCF and other relevant documents.

Updated: 4/12/2012