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Water Services Regulation Authority - Water sector to plunge £2.8 billion into the green recovery

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Water sector to plunge £2.8 billion into the green recovery

The water sector is set to invest £2.8 billion in environmental projects to
help the country build back greener.

Ofwat, in collaboration with Defra, the Environment Agency, the Drinking Water
Inspectorate, and CCW, wrote to water companies last year and challenged them
to identify ways to support the country's green economic recovery from
COVID-19. Companies were asked to bring forward new proposals and accelerating
existing ones to deliver an innovative and more resilient future for
customers, society and the environment.

Following that, Ofwat today sets out plans to support £850 million of new,
green investment projects. A further £1.9 billion of future planned
environmental projects will be brought forward to contribute to a green

Severn Trent Water, South Staffs Water, South West Water, Thames Water, and
United Utilities have received initial backing from Ofwat for ambitious new
proposals collectively worth over £850 million which will benefit the
environment and create jobs.

As part of this new package of investment, companies will commit over £157
million to help eliminate harm caused by storm overflows and trial the
creation of two new bathing rivers.

The new projects will also see companies collaborating with local partners to
reduce the risk of flooding, protect habitats, and cut pollution by investing
£89 million in catchment management and nature-based solutions. There are also
innovative improvements in drinking water treatment and supply which will
reduce energy and chemical usage and there will be up to £172 million for
measures to help customers save water, including in areas that currently
abstract water from chalk streams. These proposals will help to restore and
create a natural environment that current and future generations can be proud

These new schemes will be delivered alongside £1.9 billion of planned
expenditure which has been brought forward by twelve water companies across
England to further accelerate the green recovery and deliver hundreds of extra
environmental schemes. These include measures to improve river quality and
protect endangered species.

Several water companies are also accelerating parts of their existing 2020-25
plans, investing hundreds of millions earlier when it matters most for the
economic recovery, at no additional cost to customers.


David Black, Interim Chief Executive at Ofwat said:

'Today marks an important step in this country's green economic recovery with
the water sector stepping up to make a difference. As part of these measures,
we will see a collective package worth £2.8 billion of new investment and
accelerated expenditure to care for the environment, create jobs and support
customers and communities to bounce back from the COVID-19 pandemic.

"From tackling the most pressing environmental issues, to providing economic
stimulus with the backing of jobs and training, there has never been a more
important time to act. These proposals can be of huge benefit for people and
the planet when it is needed most.'

Environment Minister Rebecca Pow said:

'£850m of new funding shows that water companies have risen to the challenge
to help drive this country's green recovery.

'I am particularly pleased to see increased investment to eliminate the harm
from storm overflows, following calls by the Storm Overflows Taskforce to
accelerate progress in this area.

'The investments announced today, in addition to a raft of measures being
taken by the Government, will both benefit the environment and create more
jobs as we build back better, and greener, from the pandemic.'

Environment Agency chair Emma Howard Boyd said:

'The green recovery is an opportunity to go further on net zero, nature-based
solutions and environmental protection. It is hugely encouraging to see water
companies accelerate investment to deliver real and lasting improvements.

'This demonstrates a renewed commitment to reduce pollution incidents and to
prepare the country for escalating climate shocks like floods and demand for
water during heatwaves. I look forward to seeing the results.'

Marcus Rink, Chief Inspector of Drinking Water in England, said:

'We are delighted to participate in this important initiative, collaborating
with Government and other regulators to ensure that protection and enhancement
of drinking water quality is given the right priority. We look forward to
working with the relevant companies as the proposals progress.'


Emma Clancy, Chief Executive of the Consumer Council for Water (CCW), said:

'The broad support these proposed environmental improvements secured from
customers reflects people's eagerness for their water company to play a
leading role in reducing pollution in rivers and bathing waters, tackling
flooding risks and protecting our water resources.

'We're pleased that Ofwat will make sure money is returned to customers if
companies fail to deliver on their promises. Each company must rise to the
challenge of delivering these improvements and clearly show their customers
that they are getting value for money.'

In assessing the new proposals, Ofwat collaborated with Defra, the Environment
Agency, the DWI and CCW, and took their views into account. Ofwat will be
consulting on these draft decisions before making final decisions in mid-July.