# Review of Credit Arrangements in the Business Retail Market

> Contract award record from UK public-sector procurement sources.

## Key facts

- Public buyer: WATER SERVICES REGULATION AUTHORITY
- Contract winner: [KPMG LLP](/contract-winners/kpmg/public-sector-contract-awards)
- Award value: £58,996
- Award date: 12 January 2018
- Published: 17 May 2018
- Contract start: 15 January 2018
- Contract end: 30 March 2018
- Stage: awarded
- Procurement category: services
- Notice ID: 657e168c-c3ca-4706-8796-a59964eb8d6e-216839
- OCID: ocds-b5fd17-ab07c548-33ac-44a3-9f2a-52e21ec3a816

## Description

The objective of the work is to lead a review of the current credit arrangements included within the Market Codes, provide recommendations on areas that should be reviewed and options that Ofwat should consider to remedy any issues identified\. In particular, we are keen to understand whether the current arrangements provide any barriers to entry and/or foreclose the market to new entrants of particular scale\. Associated with the credit arrangements, the WRC provides a process and timelines for default and termination for failure to provide eligible credit support\. We are keen to understand whether the current provisions of the Code align with the intended timescales\. MOSL \(the Market Operator\) carried out an engagement exercise with the industry where it sought views on the wider credit issues faced by market participants\. From stakeholder responses, the potential wider policy issues appeared to be: • Barriers to entry and expansion for retailers from currently available credit support options\. • Payment windows and notification processes \(includes cashflow issues e\.g\. cliff edge, incentives for paying on time, Thames\)\. • Schedule 3 - is it working effectively and if not what are the issues surrounding its use\. • Financial assessment and market entry\. Taking the above into account, the scope of the work is therefore to provide Ofwat with a suite of options it may want to take into account in reviewing the current credit arrangements\. In particular, this should focus on: a\) Whether the current credit arrangements are fit for purpose, taking into account Ofwat's policy objectives for the business retail market, its strategy and its statutory duties\. b\) Whether there are any barriers to entry to new entrant retailers \(in particular independent retailers\) that arise from the construct of the current Codes or the current collateral requirements and whether these barriers to entry are undue\. This includes an assessment as to whether the risk sharing allocation should be amended to favour new entrant retailers with accompanying analysis and evidence\. c\) Any alternative credit options that are not currently provided for in the current suite of credit options available to retailers, drawing on precedent in other sectors and experience of relevant financial instruments\. d\) An assessment of whether modifications to the current credit arrangements need to be made for self-supply retailers\. e\) Areas of the Code that require modification or clarification, with accompanying evidence and analysis to support any such modification along with a recommendation for the change itself\. f\) Examining whether the current timelines and processes for termination and default included within the Codes are clear and aligned with the exposure of the wholesaler\. g\) Workshopping with trading parties/market participants and other relevant stakeholders to gauge views on issues relating to the above\. h\) Any suggestions the Contractor may have in addition to the above list\.

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## Source

[View the original notice on Contracts Finder](https://www.contractsfinder.service.gov.uk/Notice/657e168c-c3ca-4706-8796-a59964eb8d6e-216839)