The Competition and Markets Authority (CMA) has issued its final determinations report following references from Ofwat of its 2024 price reviews (PR24) for 5 water companies to the CMA.

Following the publication on 10 March by the Competition and Markets Authority (CMA) of a summary of its final decisions on the appeals for 5 water companies against Ofwat’s PR24 Final Determinations, the CMA has now has issued its final determinations report in full.

The CMA issued the full report to Ofwat on 10 March 2026 - the Water Industry Act 1991 required Ofwat to then send the report on to the Secretary of State. Under the legal requirements, the full report of the CMA’s final determinations must be published no less than 14 days after it is received by the Secretary of State..

The full report runs to wee over 1000 pages in total as follows:

• Volume 1: Background chapters and base costs (PDF, 5.6MB)  (26.3.26) 347 pages

  Volume 2: Enhancement costs (PDF, 2.9MB)   (26.3.26)  268 pages

  Volume 3: Outcomes (PDF. 2.9MB)  (26.3.26) 210 pages

  Volume 4: Allowed return (PDF, 3.7MB)   (26.3.26) 255 pages

  Volume 5: Risk and return, other issues and company chapters (PDF, 2.1MB)   (26.3.26)  167 pages

  Volume 6: Appendices and Glossary (PDF, 1.6MB)  (26.3.26) 89 pages

Alongside the full report, the CMA has also published a series of submissions it received in January 2026 in response to its working paper on base cost modelling published on 18 December 2025.

In February 2025, Thames Water also rejected its price control and has since been in discussion with Ofwat and others about its position. Thames Water and Ofwat agreed that Ofwat would defer making the reference to the CMA, to allow time for these discussions. After extending the deferral twice, in July and October 2025, Ofwat agreed to Thames Water’s request to defer making the reference to the CMA indefinitely.

Thames Water says CMA modelling approach “not fit for purpose” and creates “flawed and unsound framework”

Thames Water’s 29 page submission describes the CMA’s modelling approach as “not fit for purpose” and creating “a flawed and unsound framework to regulate the sector and determine base cost allowances.”

“The output of this modelling will have a direct and adverse impact on the services that companies can deliver for customers, as well as on the financeability of the sector and its attractiveness for investors.”

With regard to Thames Water’s current financial situation, the submission states:

“For the avoidance of doubt, this submission does not purport to set out the issues, arguments and evidence that Thames Water would make in its statement of case if a referral of our FD to the CMA is made.

“In particular, given the well-publicised operational and financial challenges that Thames Water is experiencing and the region-specific challenges to which it is subject, the CMA’s approach in the Base Costs WP would be wholly unsuitable for setting cost allowances for Thames Water and would leave us critically underfunded to deliver our functions and comply with our core legal and regulatory obligations.

“It is therefore imperative that the CMA’s consideration of the base cost assessment for the Disputing Companies does not in any way prejudice or predetermine any (possible) redetermination by the CMA for Thames Water.”

Economists describe CMA approach as "material departure from what we would regard as good regulatory practice"

The CMA also received a separate submission from a group of economists who have been actively involved in the PR24 redetermination process while providing advice and analysis to one or more of England & Wales’ water companies.

The Economist Practitioners paper states:

“We bring experience more generally from multiple previous CMA inquiries in the UK’s regulated industries working for regulators, regulated companies and previous CMA panels, as well as from a long line of other price reviews and merger investigations in the aviation, communications, energy, rail and water sectors….

“Specifically, we want to convey to the panel our genuine surprise, as subject matter experts, at the course that the CMA’s work in this part of the redetermination has taken thus far.”

The economists go on to level a series of criticisms at the CMA’s approach, including:

“We note that the panel has to date provided only the lightest of economic/operational justifications for its chosen equations, over and above its findings of good econometric fit. This is a material departure from what we would regard as good regulatory practice in relation to model selection and benchmarking generally, as exemplified in the CMA PR14 and PR19 redeterminations.

“It conveys a sense that the CMA panel has delegated an important part of the price review to an algorithm without providing the necessary checks and corroboration that the panel has been giving in the other aspects of its work.”

The economists from First Economics, Baringa, Reckon, Edge Economic Consulting, Oxera, Economic Insight and NERA conclude their letter by saying:

“We appreciate this is an unusual submission for us to make and for the CMA to receive. Most of us have never previously responded directly to a CMA consultation in this manner. As individuals who have advised on the economic regulation of the sector over periods of many years, we nevertheless care deeply about the water industry and its regulation. High quality regulatory decisions benefit customers, driving efficiency and improved performance, whilst also supporting investment into the sector (including from international investors) and delivering robust infrastructure that underpins the wider economy.”