Financial resilience: resources, assets, continuity

Based on verified entries in our requirements register (v0.3.1), reviewed 1 November 2026. Links go to the primary source; paragraph numbers are given so you can check every claim.

Three of Ofgem’s authorisation conditions exist so that a heat network outlives its current owner: A12 (operational arrangements and Material Assets), A13 (availability of resources) and A14 (continuity arrangements). They carry the second hard deadline in the regime: a Material Asset register and a continuity plan in place by 26 January 2027 (A12 12.7; A14 14.1).

Who is in scope

These conditions do not apply to local authorities or Excepted Companies (registered providers of social housing), nor to organisations whose regulated activities are only on Industrial Heat Networks or Self-Supply Networks (scope paragraphs 12.8, 13.4 and 14.10 of the conditions).

One exception matters: paragraph 14.9 — the operator’s duty to keep arrangements so that supply continues if a separate supplier fails — is not disapplied by 14.10, so it binds every operator, councils included, where supply and operation are split.

A13 — resources, stress and the annual confirmation

Condition A13 requires each authorised person to act responsibly so as to:

• have available the resources — including financial resources — needed to carry on each regulated activity properly and efficiently and to comply with its obligations (13.1.1);
• be able to meet reasonably anticipated liabilities as they fall due, including in times of severe but plausible stress (13.1.2);
• identify and manage risks to those resources (13.1.3); and
• keep amounts collected from consumers for maintenance, repair or replacement available for that purpose (13.1.4). On a sale or transfer, Ofgem expects such amounts to remain available to the successor, without prescribing how (financial resilience guidance 3.12).

If the directors (or appropriate senior management) do not — or should not — have a reasonable expectation that resources will be available or liabilities met, you must notify Ofgem immediately (13.2; via the digital service or in writing, guidance 3.26), and while that situation lasts you may make no payment, loan, transfer or disposal that would put the regulated activities at significant risk, unless it is essential to them (13.3).

The routine side of this is annual. With the financial monitoring data you confirm that resources are in place for the next 12 months (financial resilience guidance 3.8); the data itself — net profit or loss, income, running costs, liquid assets, assets over liabilities, hedging, plus the continuity-plan and resources confirmations — is Table 3 of the data reporting guidance, due in the quarter accounts are signed off and no later than 10 months after year end (2.6). Difficulties the annual questions would miss, or a sudden change in financial position, are notified as they occur (financial resilience guidance 3.25).

A12 — Material Assets and the asset register

Condition A12 is about the assets each regulated activity depends on — physical plant and the contracts behind it:

• Safeguard continuity: operational arrangements, including Material Assets, must safeguard the continuity of each regulated activity efficiently, effectively and with minimal risk of consumer detriment, including if the activity ceases or an insolvency event occurs (12.1).
• Hold enforceable rights (ownership or otherwise) over the Material Assets used or needed, subject to permitted security interests (12.2).
• Keep those rights transferable: a successor must be able to take the relevant interests without third-party consent and without being unreasonably disadvantaged or put on materially different terms (12.3; paragraphs 12.4–12.5 deal with obliged consents and genuinely non-transferable interests — the assessment should be documented).
• No risky security or disposals: do not grant security over, or dispose of, a relevant interest where that would create undue continuity risk (12.6; normal commercial borrowing is fine — guidance 4.10–4.16 — but refinancing that creates new security is in scope).

By 26 January 2027, create — and thereafter maintain — a register of all Material Assets, with appropriate, accurate and readily accessible information, and provide it to Ofgem on request (12.7). The guidance sets the content: for tangible assets, name or reference, location, type, description and condition (4.25); for contracts and arrangements, the agreed provisions, service, counterparty and key contacts, term and extension rights, and where the document is held (4.26). Review the register periodically at a frequency reflecting the network’s size and rate of change (4.28) and update it promptly after major capital works or significant repairs (4.29).

A14 — the continuity plan

From 26 January 2027 you must have, and keep at all times, a continuity plan: the strategy for safeguarding continuity of each regulated activity if you cease to carry it on (14.1; one organisation-level plan is expected — guidance 5.7). The plan must be accurate and prepared with due skill and care (14.2), kept up to date at all times (14.3), and provided to Ofgem on request (14.4). You confirm at registration whether a fit-for-purpose plan is in place (registration guidance 3.49) and annually thereafter (financial resilience guidance 5.34).

The test of the content is what a successor would reasonably need to carry on the activity efficiently, effectively and in accordance with its regulatory obligations (14.5) — signposting documents you maintain elsewhere is allowed (14.6). As a minimum, the guidance’s Table 1 expects: key staff (including SMRI holders, with names, roles and contacts), third-party service providers and contacts, where plan data is stored and how it is kept current, handover methodologies for information and customer data, key contractual assets, and the fuel procurement approach (5.12). Suppliers add billing-service information, PSR signposting with a vulnerable-customer breakdown, customer numbers, payment-method breakdown and debt and balance methodologies (5.21); operators add physical-asset detail by signposting the Material Asset register (5.28). Step-in details, data and cyber security, version control, stress testing, technical information and insurance are recommended where relevant and within capacity (5.29).

The plan must also set out the expected takeover process — including any contractual step-in or supplier-failure arrangements (14.7.1) — and record how A12 has been complied with (14.7.2). On a transfer, revocation or planned cessation, take all reasonable steps to keep each consumer supplied on the same or as similar as possible terms, minimising disruption and detriment (14.8).

If supply and operation are split

Where a separate organisation supplies through your network, the operator must maintain arrangements to carry on supply — itself or through a third party — should that supplier cease (14.9.1), and must actually do so if it happens (14.9.2). As noted above, this duty binds every operator, including local authorities and social housing providers.

What this means in practice

Three artefacts, each with an annual rhythm: a resources assessment behind the annual confirmation, a Material Asset register reviewed on a set cycle and after major works, and a continuity plan whose contents track Table 1. Our Document Pack includes the Financial Resilience Policy, Material Assets Policy and Register, and Continuity Plan, each clause traced to these paragraphs — see products and pricing.

This guide is a plain-English summary, not legal advice — see the disclaimer.