Introduction from our CEO

The past year has been a year of profound challenge for the non-household market, as we have fought to get to grips with the impact of COVID-19, tackled the challenge of resilience and continued to resolve market frictions.

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In our 2020/21 Business Plan, we made a commitment to make it ‘easier to do business’ in the market. This commitment has been tested by the pandemic, but throughout this year we have retained our focus on delivering improvements and reducing costs to our members, and ultimately the customers they serve.

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Last year, I said I had been “struck by the energy and desire both within our team and across the market to move things forward”. This year, I have been equally struck by the overwhelming commitment from all parties to stabilise the market and the collaboration between my team, Ofwat, Defra, trading parties and other key stakeholders.

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This year, we have continued to engage our stakeholders to understand the unique challenges of trading parties and how we are best placed to drive greater value in the market. In July 2020, we launched our newly defined purpose, vision and strategy for 2021-24 – which has informed this plan. This outlines our longer-term ambition of how we will grow and mature the market, leverage our independence, and acts as a single source of truth whilst driving efficiencies in the way we operate.

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“We believe that this plan delivers the investments that our members and the market require, whilst recognising and mitigating the very real cost challenges that exist.”

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Our strategic priorities of Service Excellence, Data Insight, Market Improvement and Organisational Capability are an evolution of the themes from our 2020/21 Business Plan and build on the foundations we put in place in 2020/21.

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We have continued to put ‘easier to do business’ at the centre of our plan. This is in response to feedback we received from members that they had been frustrated in past years with MOSL setting unclear or unrealistic objectives that were neither met nor carried into following years.

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Our first three-year business plan provides clarity on how we will deliver our commitments over the course of 2021-24 and provides assurance that we recognise our continuing commitments against the context of the economic climate we are facing.

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Over the course of this year’s business planning process and in response to Panel and member feedback, we’ve consulted earlier and refined each iteration - this has meant reducing costs and seeking opportunities to achieve our collective objectives without seeking additional budget. Our process this year has focused on engaging our stakeholders to understand the pressures they face, as well as explaining the relevance to the market of the improvement programmes.

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This plan, which is a rolling three-year business plan, focuses on driving efficiencies in our core service delivery, investing in the essential improvements to resolve long-standing market frictions to enable the market to deliver customer benefits and on keeping our Market Operator (MO) charges down.

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We believe that this plan delivers the investments that our members and the market require, whilst recognising and mitigating the very real cost challenges that exist.

Our plan for 2021/22 sets out a budget of £11.4m and covers both the delivery of core services and our improvement programmes. The budget for delivering our core services has reduced compared with the 2020/21 budget level, reflecting continued improvements in efficiency. The budget for improvement programmes has increased, driven by increased spend on the Bilateral Transactions Programme, with 2021/22 being a key year of delivery. All of our improvement programmes will go through our new gated investment appraisal and tracking process with a focus on value for money and delivery of benefits.

Overall, this means our budget of £11.4m is slightly higher than the £11.2m budget for 2021/22. We will fund part of the spend on the Bilateral Transactions Programme from our reserves, by using some of the savings we have made in 2021/22. This will allow us to reduce MO charges by 1.1 per cent for 2021/22.

Our plan also includes some additions to the scope of what we deliver as core services such as improved cybersecurity capabilities. It also incorporates the increase in headcount from this year, where have enhanced the capacity of the team to ensure consistent, high quality delivery and to enable core legal activity to be delivered in-house at a lower cost.

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Our improvement programmes also provide a clear line of sight of our planned investment through to 2023/24. The integrated plan has been phased across the three-year period and provides a clear and transparent delivery roadmap of how we will advance the market and improve customer outcomes.

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We’ve differentiated between those improvement programmes that we consider fundamental to maintaining the integrity of our services and delivering essential improvements in the market (‘must do’) and those that we strongly recommend in order to deliver the additional value customers demand (‘should do’ and ‘could do’). The programmes are set out below:

In this plan we articulate how these improvement programmes build on our work from 2020/21, how trading parties will feel the benefit and how we will deliver them over the course of 2021-24.

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We were encouraged by the broad support we received through the consultation process and believe that our final plan represents great value for money to members. This year, we have shown that we are able to deliver on our commitments to the market, whilst also improving the delivery of our core services, but we know we still need to do more. It is my hope that this plan is reflective of a maturing market operator, one that listens to its stakeholders and one that adopts a customer-centric approach to operating – delivering both benefits to our members and their customers. I would like to thank those who took the time to respond to the consultation. We have sought to reflect the common themes which emerged through the feedback in our final plan, ensuring that these changes provide additional benefit or accelerate benefits to the market.