Market Operator Services: Costs
The question
To ask the Secretary of State for Environment, Food and Rural Affairs, what assessment she has made of the potential impact of MOSL’s administrative overheads on levels of investment in water infrastructure; and whether she has considered changes to ensure that increased funding is directed to frontline services.
Answered by Emma Hardy
Market Operator Services Ltd (MOSL) is the not-for-profit operator of the non-household (business) retail water market. MOSL is funded through market operator charges levied on retailers and wholesalers, rather than through customer bills or capital investment allowances. MOSL costs have no bearing on the levels of investment that Ofwat permits water companies to make in infrastructure.
MOSL is a relatively small organisation in the context of the wider water sector. For 2025-2026, MOSL's annual budget of expenditure is £13.7m, which will be funded through Market Operator (MO) charges. These costs represent a very small proportion of overall expenditure in the water sector; by way of comparison industry total expenditure in the next regulatory period is anticipated to around £20 billion per year. Decisions on infrastructure investment are driven by Ofwat's price review process and water companies' statutory obligations.
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