Stage 2 of the Review of the Credit and Collateral Arrangements for the Business Retail Market

Further competition using Government Commercial Agency (GCA), Management Consultancy Four Framework (MCF4) (RM6309) Lot 4: Finance.

Background

As with many other sectors, the Business Retail Market is constituted such that Retailers can choose to 'pre-pay' or 'post-pay' Wholesalers for services. Whenever post-pay is used, there is the risk that a Retailer may default on payment for services they have already received from the Wholesaler. To mitigate the potential impact of this risk, a set of Credit and Collateral Arrangements (CCAs) were developed prior to market opening and are set out within the market codes which help govern and underpin the Business Retail Market.

We are currently reviewing these CCA arrangements with a view to understanding if and where they are delivering for customers and the market, and if, and how recommendations for amendment or change may be warranted. We published in May 2026 a CCA Consultation which set out our initial proposals for change, including an accompanying supporting quantitative spreadsheet. We now wish to move to Stage 2 which is to develop and publish a Decision document on our proposed changes.

Scope

Ofwat is seeking external advice for stage 2 of its work on the review of the CCA review.

The successful bidder will provide specialist regulatory and policy advice to assist Ofwat in developing final policy positions and preparing final decision materials following completion of the consultation process. Expert advice will include analysis of consultation responses; identification of key themes and evidence; assessment and evaluation of policy options; use, development and quality assurance of quantitative modelling spreadsheet(s); and help in drafting final decision papers and supporting materials.

Ofwat will retain responsibility for reaching conclusions on consultation submissions and policy choices as set out in final decision documents and materials.

The successful bidder will advise Ofwat by:

• providing independent expert advice and challenge on emerging policy positions;

• assisting with the development and refinement of policy options;

• assist in developing and quality assuring and challenging quantitative modelling spreadsheet(s);

• assessing implementation considerations, risks and unintended consequences associated with potential changes;

• expert advice on the development of decision-making materials for internal governance;

• drafting and reviewing final decision papers and supporting documents;

• providing quality assurance of written outputs; and

• attending project meetings and workshops as required.

The project has commenced and advice is needed from September 2026 until the end of February 2027.