Business Plan

Financial Summary

Deep dive two - Panel Plan integration, delivery and costs

Responsibilities of the Panel

The Panel’s primary functions are to:

Oversee code changes and make recommendations to Ofwat on any changes that may be required
Review and provide advice on market audit reports, market performance, market entry assurance and reassurance and disputes
Consider and input into the market operator’s budget and charges.
How the Panel adds value

The Panel provides independent governance of the market and supports market improvement. It keeps the market codes under review, making sure that they are operating effectively and that they evolve in a way that improves the efficiency and effectiveness of the market, promotes competition, and benefits customers.

Panel priorities

The Panel examined its strategic priorities in a series of workshops during 2019. In Autumn 2019, it outlined these priority areas in a Panel Plan. The Panel considered these priorities again in November 2020 as part of its consideration of MOSL’s business plan. The Panel’s priorities in relation to market outcomes remain delivery of:

Customer led benefits
Efficiency and effectiveness
Simplicity and accessibility
Good governance and working practice
To deliver against these priorities the Panel has identified a range of focus areas (see appendix below).

How MOSL helps to deliver these priorities

MOSL provides the resources the Panel needs to progress its priorities and is responsible for their delivery. We do this by delivering programmes of work and projects to analyse and assess options for improvement and by implementing those improvements. We provide expert resource (both in-house and through external service providers, where appropriate) and manage and co-ordinate Panel committees and sub-groups.

Costs of delivery is funded within MOSL’s overall budget. MOSL is responsible for managing its spend and activity to ensure the delivery of the Panel’s priorities, our core services and any other improvement work in support of our strategic priorities.

To ensure we deliver in an efficient and coordinated way – activity linked to the Panel’s priorities has been integrated within MOSL’s wider three-year business plan (see appendix below).

Costs of the Panel

As part of our wider programme of providing greater insight on its cost to serve and indirect costs of market participation and operation, we have analysed the cost of the Panel and the broader activities that it performs and influences.

Our costs for 2021/22 can be broken down into four categories:

Direct Panel and secretariat costs - £650k (Panel and committee, secretariat, support on disputes and market change assessment)
MOSL direct costs on activity directly or indirectly influenced by the Panel - £1,590k (People costs - input on change, performance and disputes, expert support on disputes and market change assessment). This excludes costs associated with the Bilateral Transactions Programme which we have drawn out separately in our business plan.
Indirect costs - £2,300 - £3,400k associated with the time and resource trading parties provide to support the Panel and committees, other group costs either as committee members, attendees or respondents to change consultations. Presented as a range based on high-level estimates for the average costs of relevant individuals.
MOSL market code change implementation - £500k cost of implementing approved market code changes in our central systems and legal review of activity associated with the assessment of proposed changes.

Cost of the panel

Type of meeting
Number of meetings
Direct cost per meeting
Indirect cost per meeting
Total cost
Panel and Panel workshops
£20k - £30k
£501k - £663k
Committee meetings
£14k - £21k
£696k - £981k
£5k - £7k
£292k - £408k
User Forum
£51k - £77k
£236k - £339k

[2] Dependent on provision for long-running issues (such as credit, trade effluent or data protection – as seen in 2019 and 2020)
[3] Dependent on volume of complex change and other Panel-driven work

Ensuring value for money from the Panel
We have realised £151k savings from remote working this year and plan to retain these going forward with 80 per cent of meetings being held remotely in 2021/22
The ongoing Market Governance Review, Market Code Simplification work and Market Assurance reviews are expected to provide recommendations on how we can adjust the way the Panel and its committees operate to drive value for the market. Improvements from these reviews will be rolled out across the next three years as outlined in our business plan
Going forward, we will be undertaking post-implementation and benefits realisation reviews on the major improvement programmes and changes that are considered by the Panel.

Appendix: How the Panel priorities are integrated with MOSL’s three-year business plan

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