Update on timing and next steps on the Supplier Licensing Review

Correspondence and other

In October 2019, we published a consultation and draft impact assessment on the next stage of our Supplier Licensing Review (SLR), setting out a package of proposed reforms to the ongoing requirements and exit arrangements for suppliers. In the consultation, we noted that, following a period of engagement and consultation, we expected to progress to statutory consultation in early 2020. 

As expected, we will be progressing our reforms to statutory consultation in spring 2020. For the majority of our SLR proposals – including milestone assessments, fit and proper tests, and independent audits – our approach to introducing the reforms will remain unchanged. However, following careful consideration of the feedback we have had from stakeholders, we will take a phased approach to introducing our cost mutualisation protection proposals – these are the reforms that aim to minimise the costs that need to be mutualised across the rest of the industry when a supplier fails.

The first phase will seek to introduce a high-level principle to drive suppliers towards taking action that mitigates the extent of costs to be mutualised in the event of failure, and will be delivered alongside our wider SLR reforms in our spring 2020 statutory consultation. In parallel to this, we will carry out a further round of consultation on the second phase of our reforms, which will build on our October 2019 proposals to introduce specific requirements on suppliers to put in place protections for costs otherwise at risk of mutualisation. We anticipate taking our phase two reforms to statutory consultation over the summer.