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Water companies set out £96bn spending plans

Proposals will almost double investment between 2025 and 2030
By Greg Pitcher

Water companies have set out plans to almost double their spending during asset management period (AMP) 8 between 2025 to 2030.

The utilities filed their business plans to regulator Ofwat on 2 October, asking for permission to hike customer bills so they can invest a combined £96bn.

If approved, a raft of infrastructure projects to improve the reliability of clean water supplies and reduce sewage spills into rivers and seas will begin.

Water companies trade body Water UK said utilities had asked for approval to build 10 reservoirs and to use cutting-edge technology and nature-based solutions to reduce wastewater overflows.

Thames Water outlined plans to replace 500km of water mains, install 1M smart meters and commission the Tideway Tunnel.

Anglian Water pledged to start planning for two new reservoirs, create an area of wetland the size of 100 football pitches and renew 695km of vulnerable pipes.

Yorkshire Water said it would refurbish five reservoirs following condition surveys. It also wants to carry out projects at poorly performing water pumping stations and replace 746km of mains.

Dwr Cymru Welsh Water promised to replace 174km of asbestos cement pipes and continue with its programme to improve the safety of 29 dams. It will invest £3.5bn during AMP8.

Severn Trent said it would invest £12.9bn in AMP8. Plans include making biodiversity improvements at 26 sites, replacing 30ha of hard surfaces with sustainable drainage and installing 1,000 water quality sensors in rivers.

South West Water will invest £2.8bn on upgrading a third of the water treatment works in Devon and Cornwall; reduce leaks to less than 10% of water supplied; create a water grid to ensure all strategic reservoirs are connected and invest in large reservoirs starting with Cheddar 2 near Bristol.

United Utilities’ £13.7bn plans include upgrading more than 900km of water mains, reducing storm overflows by more than 60% by 2030 and strengthening the network.

Affinity Water’s £2.1bn programme includes reducing leaks and restoring rivers.

Water UK chief executive David Henderson said: “These record-breaking investment proposals will secure our water supply as we deal with a changing climate and a growing population.

“Water companies are seeking regulatory approval to reduce overflow spills into rivers and seas as fast as possible and to double the number of households receiving support to pay their bills.

“Ofwat now needs to back these plans that are both ambitious and vital so that we can provide the highest quality drinking water for a growing population, ensure the security of our water supply in the future and reduce the use of storm overflows as much as possible.”

Yorkshire Water chief executive Nicolas Shaw said its programme would “protect and improve the quality of water in rivers and at coasts, leading to cleaner, safer water environments that support recreation and biodiversity across the region.”

Welsh Water chief executive Peter Perry said: “This is the most ambitious business plan we have ever developed, […] While it presents a significant challenge, we are confident that it is both deliverable and financeable and will help to improve our performance significantly.”

Thames Water interim chief executives Cathryn Ross and Alastair Cochran said its planned £18.7bn total expenditure, included “a record £4.7bn investment in our network and other assets”.

Severn Trent chief executive Liv Garfield said: “ This investment will make sure we have a positive economic, environmental and social impact for decades to come for the communities we serve.”

An Anglian Water spokesperson said its plan would create more than 7,000 new jobs and deliver £4bn of environmental projects, £1bn of which would address storm overflows.

Ofwat will publish a draft decision on whether to approve each company’s plans by June next year. The companies will be consulted before final decisions are made in late 2024.

Commenting on the business plans, Ofwat chief executive David Black said: “As we work through the business plans, we will continue to monitor companies’ performance, hold them to account for delivering improvements and push them to build meaningful plans to change.”