Ofwat wants to fast-track £1.6bn of investment in the water industry, and require suppliers to speed up delivery of schemes to deal with storm overflows, sewage leaks and poor water quality.
The watchdog is pushing to approve the accelerated delivery of 31 investment schemes with work beginning in the next two financial years, from 2023 to 2025.
This includes £1.1bn to improve over 250 storm overflows and reduce the annual average of spills by 10,00 – such as work to improve the water quality at the bathing water site at Ilkley on the River Wharfe and significantly reduce spills into Lake Windermere.
The funding will also involve £400m for water resilience schemes, including installation of 462,000 smart meters, and new water resource and water quality projects.
In total these projects will deliver and protect 159 megalitres per day of water supply, helping to increase drought resilience.
There is also £160m to help reduce nutrient pollution and support nutrient neutrality at 14 locations –protecting natural ecosystems while facilitating housing and economic development.
In October 2022, Ofwat and Defra invited companies to propose schemes to accelerate investment in water resilience (supply and demand) and storm overflows – which must be started prior to April 2025 and completed by 2030.
Early approval of schemes are meant to help the sector to gear up for a larger investment programme over the coming years and will help deliver benefits for customers and the environment sooner.
Ofwat has also identified a further 37 schemes, totalling £376m of investment in the 2023-25 period and £1.5bn overall, that companies can push forward if they are included in final company environmental plans and address concerns raised by the regulator.
Its emphasis on investment follows Ofwat reports from last December which revealed water and wastewater companies are falling behind on their investment plans – leaving promised service improvements behind schedule or undelivered.
Ofwat confirmed 14 companies underspent their budget on improving their water network and eight companies underspent their budget for improving their wastewater network between 2020 and 2022.
Affinity Water and Northumbrian Water spent just 47 per cent and 48 per cent of their water enhancement allowance respectively, and Yorkshire Water and South West Water spent just 20 per cent and 39 per cent of their wastewater enhancement allowance respectively.
The main areas of underspend across both categories include drought resilience, improvements to sewage treatment works, improvements to storm tank capacity and reducing spill frequency.
David Black, Ofwat chief executive, said: “Substantial investment is needed to address the challenges to our water system of storm overflows, river and bathing water quality and drought resilience. We are pleased that we’ve been able to work with companies and identify significant investments which companies can start well before the next price control period.
“This will bring substantial benefits for customers and the environment and bring them faster. We want to see companies making more rapid progress in delivering improvements, and will hold them to account if they fall short”.
When approached for comment, industry body Water UK announced that suppliers were in favour of the move.
A spokesperson said: “Water companies are taking comprehensive action to improve the nation’s rivers and now, with today’s approval by Ofwat, we will be able to accelerate our efforts further.
“Today’s announcement recognises the need to move faster. It represents a down-payment on what will be one of the largest infrastructure programmes ever to improve our waterways and help protect against climate change.”
Environment Secretary Therese Coffey is expected to announce unlimited fines for companies that pollute bodies of water and cause environmental damage in a new “Plan for Water.”