There are significant uncertainties inherent in precipitation forecasts and these uncertainties can be communicated to users via large ensembles that are generated using stochastic models of forecast error. The Met Office and the Australian Bureau of Meteorology developed the Short Term Ensemble Prediction System (STEPS) was developed to address these user requirements and has been operational for a number of years. The initial formulation of Bowler et al. (2006) has been revised and extended to improve the performance over large domains, to include radar observation errors, and to facilitate the combination of forecasts from a number of sources. This paper reviews the formulation of STEPS, discusses those aspects of the formulation that have proved most problematic and presents some solutions. The performance of STEPS nowcasts is evaluated using a combination of case study examples and statistical verification from the UK. Routine forecast verification demonstrates that STEPS is capable of producing near optimal blends of a rainfall nowcast and high resolution NWP forecast. It also shows that the spread of STEPS nowcast ensembles are a good predictor of the error in the control member (unperturbed) nowcast.