WIREDGOV

Water companies must improve their plans to secure reliable water services in the coming decades, according to Ofwat.

Each water company has developed draft Water Resource Management Plans (WRMPs) to set out how they ensure water needs are met through to 2050 and protect the environment. Although the draft plans would see more infrastructure delivered to increase supply and manage demand, the regulator is challenging companies to develop more creative and innovative ideas and ensure they deliver best possible value for customers. Companies need to demonstrate how improvements will be delivered and that the costs are efficient.

In a series of assessments on each company’s plan – which the regulator has provided to the Secretary of State for Environment, Food and Rural Affairs in England and the Minister for Climate Change in Wales – Ofwat has called on companies to drive better long-term solutions and deliver better value to achieve the best outcomes for customers and the environment.

WRMPs are updated by water companies every five years and set out how water resources in each area are managed and developed, to ensure households and businesses have a secure and reliable water supply over a 25-year period. Following Ofwat feedback, companies must now improve their final plans, due for publication in autumn 2023.

David Black, Ofwat CEO, said:

“Customers depend on companies to provide reliable water supplies. This requires companies to prepare properly for population growth and the impact of climate change. Our assessment of draft plans shows that companies have more work to do to develop their proposals to meet future challenges. Companies must take the opportunity to revisit and strengthen their plans.

However, we were encouraged by the level of collaboration companies have shown in delivering a first set of regional plans, in addition to their area-specific plans and look for more of this as they develop their final proposals.”

Options under consideration in the plans aim to increase supply including by cutting leakage, developing new reservoirs, promoting water recycling, new water transfers between companies and making operational improvements.

Companies are also working to improve water efficiency in households and businesses.

Final plans will be received by Ofwat in autumn 2023 and following assessment, the regulator will provide further feedback to the Secretary of State and Welsh Government.

Notes to editors:

• WRMPs are fundamental to companies carrying out their legal obligations as water companies. A WRMP sets out how a water company will manage and develop water resources in its area, to be able to, and continue to be able, to secure a supply of water for its customers over a period of at least 25 years.
• This is a Defra and Welsh Government-led consultation. Ofwat is a statutory consultee for the 2024 round of WRMPs and has worked with the Environment Agency and Natural Resources Wales to contribute to the Water Resources Planning Guidelines that companies follow in preparing their plans.
• In addition to publishing its reaction to the draft WRMPs, Ofwat has commented on the 5 Regional Water Resource Plans and has issued feedback on each regional plan. Each regional group must produce a single plan that builds resilience against a range of uncertainties and future scenarios. Together, the five regional plans must add up to meet the collective national need.
• The letters issued to the Secretary of State are available here.
• Companies in bold (see table below) will not have an assessment letter published, as their consultations on plans are continuing. Ofwat will finalise and publish feedback letters at the end of the consultation periods. For the Water Resources East Regional Plan – Ofwat has delayed its assessment due to a later publication of the relevant WRMPs.

*New Appointment and Variation (NAVs) are companies that have successfully applied to become a new service provider within an existing water company’s region. This means they can provide wholesale water and/or sewerage services for a specific area, typically for a new or large development.