Business Plan

Financial Summary

Improvement programmes

Our improvement programmes demonstrate a commitment to move to a longer-term integrated plan through which we can deliver on our strategic priorities. The activities outlined in each improvement programme have been phased to consider the prioritisation of market needs, to avoid large peaks or upfront costs, and costed at an affordable level. The average annual cost is below the comparative 2020/21 budget.  

This is the first business plan in which we have provided a multi-year view of our improvement programmes. While our strategy sets out what we will deliver, this plan outlines how we will deliver, including how the individual improvement programmes interlink and complement one another.

This section sets out the costs of the improvement programmes. The costs for 2021/22 form part of the overall MOSL budget for the year, which we will be seeking member approval for.

The improvement programmes and related costs for 2022/23 and 2023/24 represent our current plan. We will roll this plan forward each year, maintaining a three-year view. In doing so, we will seek to avoid major adjustments in future years, appreciating the need for a stable and consistent plan. We recognise, however, that this plan must be flexible to adapt to changing priorities, the economic climate and political landscape, and it must be responsive to trading party views.

Cost of our plan

In assessing our three-year improvement programmes to 2023/24 we have benchmarked against the 2020/21 budget of £1,560k, as this is the amount that was used to set Market Operator (MO) charges for 2020/21.

The cost and phasing of our improvement programmes through to 2023/24 has been developed in accordance with the following principles:

An average annual cost equal to, or below, the budget level for 2020/21 (£1,560k) – ensuring that the programme does not create upward pressure on MO charges
Clear and transparent prioritisation between ‘must do’, ‘should do’ and ‘could do’ – giving members visibility over how and when we have allocated funds
Phasing in line with these priorities - ensuring high confidence of delivery and without the need for large upfront cash outlays
A reducing spend profile each year – recognising that there is greater uncertainty in later years of the plan.

Our proposed phasing of the programmes shows an increase in cost in 2021/22 (driven by the Bilateral Transactions Programme) before reducing in 2022/23 and 2023/24. The average annual cost is £1,450k – lower than the 2020/21 budget level.

Improvement programmes cost
2020/21 budget (£,000)
2021/22 proposed budget (£,000)
2022/23 forecast (£,000)
2023/24 forecast (£,000)
Average - three-year plan (£,000)
Planned cost
Optionality – different phasing of our plan

Our plan has a phased delivery over the three-year period. However, we recognise that although this effectively spreads the cost for members over time, it does mean that benefits realisation for some programmes are pushed back to years two and three. As part of our consultation, we obtained views from members on the phasing of our plan, including:

Changing the mix of activity but with the same overall profile – for example, bringing one workstream forward to push another back - or changing the mix of spend across workstreams (based on consultation feedback received, no changes were made)
Changing the overall phasing of work and spend each year. In this case, funding would also need to change - either through changes to MO charges in each respective year, or through alternative sources of funding such as bank finance (as a result of consultation feedback received, we have brought forward some of the activity in our Data Insights programme. We have moved £100k of spend from 2023/24 to 2021/22 to enable this acceleration of work. This spend in 2021/22 will be funded through our reserves rather than additional MO charges)
Using bank finance to bring forward investment which would enable earlier realisation of benefits, but comes with an increased risk profile as it would need to be repaid via higher MO charges in later years and would be subject to agreement of satisfactory terms and rates between MOSL and the finance provider (we are not using bank financing. Our improved reserves position at the end of 2020/21 has allowed us to fund the one off increase in our improvement programme spend (driven by the Bilateral Transactions Programme) from reserves, without needing to increase MO charges).

Costing of each element of the plan

We have individually costed each improvement programme as set out below. The year with cost allocated represents when the majority of delivery will take place, or the most critical or complex work will occur which requires additional resource. Activity in earlier years will be delivered using existing resource and budget as capacity allows. Further detail on phasing is provided in the programme ‘deep dives’.

Consultation form