LATEST NEWS
Ofwat publishes draft determinations for the PR24 cost change process
We’re pleased to have supported water companies in their first cost change applications at AMP8, which unlocks critical investment worth £3.4bn to deliver resilient water and wastewater services for current and future customers.
• We worked with Water UK and its members to consider ‘A Practical Approach to What Base Buys’. In its Draft Determinations, Ofwat highlighted that its approach “reflects the findings of the Economic Insight review by recognising that no single methodology is appropriate in all circumstances. Instead, we have adopted a proportionate and evidence-led framework that combines sector-wide benchmarking with company-specific considerations where justified, taking account of the characteristics of different asset classes and the need to protect customers from the risk of double funding.“
• Eleanor Clutterbuck worked closely with Thames Water over the last 6 months to support the development of its Major Projects Cost Change Submission. Thames Water has provisionally been provided 99% of its total requested allowance, one of the highest across the industry.
• We also worked with Severn Trent Water in developing the evidence to support its asset health applications, including a tailored approach to estimating ‘what base buys’, which Ofwat has accepted in full.
Football regulation – understanding financial risk
The Independent Football Regulator (IFR), established last year, will introduce financial regulation to the football industry for the first time.
Sam Williams has published an article in FC Business Magazine exploring how clubs can use the IFR’s forthcoming financial regulation not simply as a compliance requirement, but as an opportunity to improve commercial performance through understanding financial risk.
Happy birthday EI!
This month, Economic Insight turned 15 years old! We are extremely proud and happy to have reached this milestone.
Since our establishment in 2011, we have grown rapidly and are now widely recognised as a leading economics consultancy, routinely advising major private and public sector organisations at the most senior levels.
Our success has been dependent on the quality of our analysis and our focus on providing valuable and actionable advice. Everything we do is underpinned by a deep level of care and a genuine commitment to understanding our clients and supporting them in achieving their objectives.
We look forward to continuing to support our clients on the issues that matter most.
Response to the Independent Football Regulator’s consultation
Economic Insight has submitted a response to the Independent Football Regulator’s latest consultation on the new regulatory framework for football in England and Wales. Our submission highlights that the proposed approach may result in inconsistencies in risk measurement and management across clubs. We identify opportunities to make refinements to address these, and to ensure regulation remains proportionate.
Concerns with implementing the new regulatory model for water
Sam Williams has published an article in the UK Water Report, raising some concerns regarding the absence of a sufficiently strategic approach to implementing the new regulatory model for the water industry and the danger of conflating ‘doing things’ with ‘progress’.
Economic Insight Promotions
We are pleased to announce that Aastha Mantri, Ian Thompson and Christopher Pickard will join founders James Harvey and Sam Williams on the Board, reflecting their long-standing contribution to the firm and its continued growth.
CMA publishes PR24 final determinations for appealing companies
The Competition and Markets Authority (CMA) has published a summary of its PR24 final determinations for the five companies that appealed Ofwat’s PR24 determination. Overall, the CMA awarded the appellant companies £463m of additional revenues, relative to those set by Ofwat. Key factors contributing to this were:
– An increased cost of capital from 4.03% to 4.20% (appointee, CPIH-real)
– £289m in additional enhancement costs
– A 0.3 percentage-point reduction in the frontier shift efficiency challenge
Economic Insight advised Wessex Water during the redetermination process, helping them secure significant gains in relation to enhancement expenditure. In addition, Economic Insight supported all five appellants on frontier shift, where we secured a landmark win for the industry, likely with wider implications for other regulated sectors.
More information on the CMA’s summary of its final determinations can be found here
CMA consumer protection and greenwashing: practical guide for brands
Economic Insight, in partnership with Mishcon de Reya, has published a practical guide to help retail businesses navigate the CMA’s evolving consumer protection and greenwashing rules.
The Digital Markets, Competition and Consumers Act 2024 (DMCCA) gives the CMA direct consumer enforcement powers, including the ability to fine companies up to 10% of global turnover for consumer law infringements.
Compliance with the CMA’s rules requires a clear understanding of what information consumers rely on when making transactional decisions – and how that information can be presented clearly, accurately and at the right time.
Our guide focuses on the practical questions businesses should be asking now.
Quantifying damages in FSMA litigations
Sam Williams has published an article in Commercial Dispute Resolution providing his reflections on the Autonomy judgment and the key lessons for quantifying damages.