Watchdog tells water firms to speed up building new reservoirs

Regulator Ofwat has written to water companies telling them to build new reservoirs and other major projects more quickly in the coming years.

In a letter to water company bosses, the watchdog said they must find ways to “deliver (projects) more efficiently, effectively and achieve earlier completion”.

Ofwat chief executive David Black wrote: “We are asking you to consider your major projects or programmes of projects and assess how you can accelerate work and/or gain benefits from optimising, development and construction.”

Outrage

Water firms have been the subject of growing outrage among MPs and campaign groups in recent years, amid rising consumer bills, vast quantities of sewage pollution. and bonus payouts to top executives.

Ofwat recently approved a sharp increase in bills across most parts of the sector, which it said should help firms invest in their pipes and sewers and reduce pollution and outages.

Households in England and Wales will see their water bills rise by an average of £86 over the next year alone after the increase this month.

Ofwat allowed companies to raise average bills by 36%, or £157 in total, over the next five years, to £597 by 2030, to help finance a £104 billion upgrade for the sector.

Major projects

There are 30 major projects planned across England and Wales in next 15 years, including nine reservoirs in England. The last time a major reservoir was built was more than 30 years ago.

🚨 BREAKING: Chancellor Rachel Reeves will tomorrow announce that she has approved new reservoirs in the following areas:

– Two in Somerset
– Cambridgeshire
– Hampshire
– Kent
– Lincolnshire
– Oxfordshire
– Suffolk
– West Midlands

This is part of the now approved water…

— Politics UK (@PolitlcsUK) January 28, 2025

“We expect construction of a significant number of these major water sector projects to commence within the next five years, an unprecedented ambition for the sector,” Mr Black said.

Separately, a Government-appointed Independent Water Commission is looking into how it can reform the sector, and has previously said it could even replace Ofwat.

The commission is looking into how to improve the regulatory system, water company ownership models, and boost the resilience of assets from pipes to reservoirs, as well as supply chains.