An urgent cash advance of £1.5 million is required to fund Ofwat’s immediate operating cost commitments and prevent default to contractual suppliers while we await Royal Assent of supplementary estimates.

Ofwat is heavily committed currently to a range of major projects that rely on the expert input of a number of specialist suppliers. Without this input Ofwat would be unable to regulate effectively and protect the interests of 52 million consumers in England and Wales. Ofwat contracts with a large number of SMEs and therefore it is in the public interest that we make payment promptly within agreed contractual terms.

Parliamentary approval for additional resources of £3 million was sought in a supplementary estimate for 2012-13 on 13 February for the water services regulation authority. Pending that approval, urgent expenditure estimated at £1.5 million will be met by repayable cash advances from the contingencies fund.