Ofwat pushes for accelerated water infrastructure projects to drive UK economic growth

Ofwat has issued a strong call to action to the water sector, urging faster and more efficient delivery of 30 major infrastructure projects — nine of them reservoirs — worth £50 billion over the next 15 years. In a letter to water company chief executives, Ofwat Chief Executive David Black set out a vision for accelerating project timelines to support the government’s wider economic growth strategy while delivering substantial environmental and societal benefits.

“The water sector plays a key role in enabling economic growth and improving outcomes for customers and the environment,” Black wrote in the letter dated 14 March 2025. “We want to optimise the pipeline of major projects to ensure best value for customers. We also want to ensure that synergies across projects, and the societal, environmental and economic benefits are maximised.”

Ofwat expects construction on a “significant number” of projects to begin within the next five years — “an unprecedented ambition for the sector”. To support early-stage work, £2 billion has already been allocated through PR24. Companies are being asked to review how they can “accelerate work and/or gain benefits from optimising, development and construction”, while still maintaining high-quality feasibility and design phases.

The regulator is also encouraging greater collaboration across companies and with stakeholders, particularly through RAPID (the Regulators’ Alliance for Progressing Infrastructure Development), to unlock cross-sectoral opportunities. These include enabling housebuilding, supporting hydrogen production, and powering AI and data-driven industries — aligned with the government’s AI Opportunities Action Plan.

Crucially, Ofwat is asking companies to outline how they can deliver projects “more efficiently, effectively and achieve earlier completion”, and to identify the societal, environmental, and economic benefits their programmes could bring forward. In doing so, companies are also encouraged to consider strategic coordination and co-timing of projects to maximise efficiency across the sector.

Water companies have until 18 April 2025 to respond with proposals on how they will accelerate and optimise their project portfolios.

In addition, Ofwat has published a response to the Primer Minister, Chancellor and Business and Trade Secretary, outlining how the regulator will support the government’s growth mission. Ofwat proposed changes to national planning and regulatory frameworks, including amending the Specified Infrastructure Projects Regulations to expand use of the successful licensed infrastructure provider model, and streamlining the Development Consent Order process for major schemes. The regulator also called for continued involvement of the National Wealth Fund to support financing.

In the letter to No. 10, Ofwat committed to five key actions to support growth: delivering the £104bn sector upgrade efficiently, accelerating major projects, reforming infrastructure planning, building workforce skills, and doubling the innovation fund to £400m. David Black noted, “We are committed to working collaboratively with the water industry to help accelerate the delivery of additional £50bn of investment to protect customers’ long-term supplies of world class drinking water.”