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Excerpts from the latest edition of The UK Water Report.

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Expert Forum | Policy

Pace of change

Before the Independent Water Commission interim findings were published, we asked how expectant the sector is of substantial change in the next five years?

By Karma Loveday

Judging by responses to our latest The UK Water Report Expert Forum survey, the sector is envisaging changes firmly in the evolutionary rather than revolutionary camp. 27% thought the sector would be largely the same as today by 2030, whereas 18% thought it would have changed substantially, and 55% believed it would have changed a little.


Among those expecting significant change by the end of the decade, the points were made that review after review has recommended it, and there is some urgency for a shake-up. For example: "I think the sector will have to change significantly. The pace at the start of AMP8 does not give confidence that the programmes will be delivered. To have a chance to spend the sums needed is going to need a very different approach.”

“Unfortunately, policy reviews don’t build public trust, it is delivering outcomes and actions on the ground that do. Until the ‘visible’ performance of the water companies improves, trust will not be restored."

At the other end of the spectrum were those who expected the sector to remain largely as it is by the end of the decade. One remarked, “most of it” would in fact be unchanged. Some reasons given here included: “It's too big of a beast to make significant changes” and “The amount of investment at risk in the sector is too high to introduce major changes.”


We also asked the Expert Forum to what extent the policy changes made following the conclusion of the Cunliffe and other reviews will lead to public trust in the water sector being restored. Two-thirds thought trust is likely to be partially restored, and one-third that this is unlikely to happen. Nobody thought the reviews and the policy follow-up would substantially restore trust.


One pertinent comment was: “Unfortunately, policy reviews don’t build public trust, it is delivering outcomes and actions on the ground that do. Until the ‘visible’ performance of the water companies improves, trust will not be restored. Bills going up only makes it more difficult because the expectation of improvements has now been increased (30% bill increase means performance should improve 30% to just keep public trust static)!”

Report | Finance

Fitch forecasts AMP8 fortunes

Polarisation looks to be in store for the water sector. Verity Mitchell looks at early signs.

Fitch Ratings has issued a report on the UK water sector giving further detail around its assumptions for Outcome Delivery Incentives (ODIs), fines, total expenditure (totex) performance and debt costs in AMP8.


Fitch considered that cash flow impacts will now be more severe for weaker performers and more favourable for stronger ones. It forecast net cash ODI penalties of £560m in AMP8, and Environment Agency (EA) or Ofwat fines of about £900m (of which £300m relates to Thames). 
Fitch’s view was that Ofwat’s emphasis on infrastructure enhancement will be beneficial in the long term. However, AMP8 brings challenges in managing totex, price control deliverable (PCD) clawback risks, the ODI framework and financing performance.


Fitch assumed the companies it rates will need to raise £37.5bn of new debt and £5.2bn of new equity, with dividend distributions of £5.3bn. Fitch said companies with limited ratings headroom and poor operational and environmental performance may struggle to secure new equity.

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By Verity Mitchell

“Companies with limited ratings headroom and poor operational and environmental performance may struggle to secure new equity.”
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“Just as there are water consumption targets for new house builds in England and Wales, should there not be a similar requirement for new data centre builds – especially in water-stressed regions?”
Report | Water efficiency

Rise of the data centres

Phillip Mills surveys the prospective growth of data centres by region and calls for them to have water consumption targets.

By Phillip Mills, Director of Policy Consulting Network

This article provides an in-depth analysis of larger data centres in the planning, approved or in-development stages – by region – as well as of those expected to be in operation by or before 2030.


Analysis by AI has identified 20 larger data centres expected by 2030, including ‘hyperscale’ and ‘enterprise’ facilities. Over half of these data centres are planned for London and the South East – a significant area of water stress.


Water demand has been calculated based on an assumption that new data centres will be significantly more water efficient than existing facilities.


This approach suggests the South East – the region with the most hyperscale and enterprise data centres proposed – is expected to see an increase in water demand, assuming all proposals go ahead, of between 10.0 and 22.5 Ml/d by 2030. This is equivalent to demand from a population of 91,000 to 205,000 (assuming 110l/h/d per capita consumption).


There must be a more sustainable way forward. Just as there are water consumption targets for new house builds in England and Wales, should there not be a similar requirement for new data centre builds, especially in water-stressed regions?    

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Report | International

French connections

Water met money at the Global Water Summit in Paris, with rich lessons for the UK on investment, water reuse and climate resilience.

By Karma Loveday

The Global Water Summit’s (GWS) URL is www.watermeetsmoney.com . When you get there, it becomes obvious why. The focus is fundamentally transactional; if you want to know who is investing where, who is selling what to whom, and how much x market is set to grow in the next 12 months, this is the place for you.


The 2025 event – which I attended last month at the invitation of our parent company and GWS host Global Water Intelligence (GWI) – was a convention of the world’s most serious water players – utilities, cities, national governments, industry and, crucially, investors – across three hectic days in Paris. Over 1,000 people were treated to the likes of four simultaneous conference streams; all day every day 1-2-1 networking; 40-at-a-time roundtable discussions; and a glimpse at global water excellence at the awards evening.
The starkly sobering theme framing the whole event was the need to accelerate investment in water in the face of breaching the 1.5ºC global heating threshold. But what did I take away for a UK audience in particular?

  1. We don’t exist in a vacuum
    That sounds obvious, but it is easy to be introspective when you confine your horizon to UK borders as a matter of course. But look up and out, and our water sector has a lot in common with others from around the world.

  2. Capital is available, but easily distracted
    Trump was busy changing his tariff policies again as the Paris meeting progressed, casting a long shadow over proceedings. Trade wars, let alone some kind of macroeconomic event, would make it difficult to invest. Weighing against this, delegates generally agreed that increasingly acute experiences of extreme weather would spur water investment.

  3. Private finance is welcome, but UK privatisation is frowned upon
    Suez’s water division chief executive, Pierre Pauliac, pointed out that there is “recognition that solutions will come from private water businesses”. That seemed true. Along with a much expanded role for multinational development banks, private finance – including in blended models, was generally considered essential and welcome.
    But the relentlessly negative news flow about the UK, on top of the inherent faith in public ownership of water that is common around the world, meant there was little love lost for the UK model. 

  4. Reuse is going mainstream
    As the UK embarks on its journey with water reuse, there was a real sense at the GWS that the world is at some kind of tipping point, where reuse ceases to be just for specific geographies or contexts, and becomes a widespread water resource. "Let's just normalise it," urged Rolfe Eberhard, introducing a forthcoming report from the World Bank on scaling potable reuse for households and industry.

  5. Engage!
    In summary, the Summit combined a heady mix of anxiety, urgency, good intent and great ideas. With such a gulf between current water investment and climate-induced need, many more such meetings will be needed to keep the pressure for action up, and to convene conversations that make action possible. 
    While not every strand of discussion will have direct or immediate relevance to UK audiences, the bigger picture is well worth being abreast of, and the rich seam of experience and opportunity available must surely be considered invaluable

“There was a real sense at the GWS that the world is at some kind of tipping point, where reuse ceases to be just for specific geographies or contexts, and becomes a widespread water resource.”
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Interview | Paul Gardner, Glanua

A decade of disrupting

Ten years on from entering the UK water market from Ireland, Glanua’s Paul Gardner shares lessons for other hopefuls on how to survive and thrive.

By Karma Loveday

When Paul Gardner arrived in London in 2015 to set up Glanua’s (then Glan Agua’s) UK operation, he was essentially a one-man band. He jokingly compares himself to Tom Hanks' character in Castaway – alone with his metaphorical ‘Wilson' in a single desk space for six months before even getting any admin help.


Today, Glanua is a dynamic water sector player with frameworks across multiple water companies and ambitious growth targets. So, in a market notoriously difficult to enter and thrive in, how has Gardner and Glanua done it?

“We were surprised how rigid the market was.”

Competition Watch

Report | Policy

The making of the market

Non household market stakeholders call on the Cunliffe Commission to unleash, not dimish, the business retail space.

By Karma Loveday

Business retail market stakeholders were understandably keen for their issues not to be overlooked by the Independent Water Commission as it grapples with a massive remit. They sensibly targeted their responses to the Call for Evidence towards relevant issues.


Unsurprisingly given its enthusiasm for the potential of the market, MOSL urged the Commission not to go down the route of removing all but the largest customers (those using over >50 ML/year) as was floated in the Call for Evidence. “Doing so would reduce the market to just 1,600 customers and create inefficiencies and extra costs (fixed costs to serve a smaller number of customers will remain and costs to unwind the market will be significant to bill payers).” Moreover it said “there is no evidence to suggest smaller customers will be better served in the household market”.


MOSL argued that rather than diminishing choice, the focus should remain on the regulatory barriers and inefficiencies that are preventing smaller customers from fully realising the benefits of competition. It made comparison with the Scottish market: "The market started to flourish in 2014/15 (seven years after market opening), which aligned with the retail margins being increased from an average of c.10% to c.25% (retailer margins for smaller customers (Group One) in England and Wales are set at 2%).”


The Strategic Panel shared MOSL’s position on not diminishing the market size. It pointed additionally to its Roadmap to a flourishing market as a way forward.


The Major Energy Users’ Council, an industrial and commercial customer membership body, said pointedly that its members do not want to go back to monopoly provision. It supported fast track smart meter rollout for large customers; a statutory obligation on water efficiency similar to the ESOS scheme in energy; and incentives to be made available to those best placed to save water – customers.

“There is no evidence to suggest smaller customers will be better served in the household market.”
Report | Water efficiency

Thirsty business

Water saving projects dominate the fourth round of Market Improvement Fund wins.

By Karma Loveday

Water efficiency projects have dominated wins in the latest (fourth) round of awards from the non-household (NHH) retail market’s Market Improvement Fund. Four winners took away £502,000, which was only half the total available pot of £1m. A further nine bidders were unsuccessful in the competition, which was judged by a subset of the Strategic Panel. The successful projects are summarised below.

Calculating the cost of Water Scarcity on the NHH Market 
Applicant: Public First. Sponsor: South East Water. Delivery Partner: Waterwise
This project aims to assess the economic impact of reducing business water demand and the consequences of inaction. It will explore business attitudes towards water scarcity and its implications for commercial growth. By analysing water use trends, economic impacts and policy influence, the project seeks to create awareness and encourage regulatory action to support demand reduction.

NHS Direct General Hospitals Water Partnership Programme
Applicant: 20Fifty Partners.  Sponsor: Business Stream
This project is a pilot initiative designed to address water resource challenges in UK hospitals. It aims to improve water management practices by identifying water risks and implementing data-driven solutions. Through structured workshops, data collection and risk assessments, the project will support hospitals in mitigating water-related issues and ensuring a stable water supply for healthcare operations.

NHH Water Efficiency Collaboration Portal
Applicant: Save Water Save Money. Sponsors: TWRC and Wave
This project is a trial of an existing household digital platform, GetWaterFit, which curates water efficiency offers from different providers into a single system to improve customer engagement and effectiveness. It will deliver a customer-facing business water market portal, which will provide an assessment of water usage by a business based on self-certification and using a database of users defined by segmentation, numbers of taps, toilets and employees. It will also provide a proposal of solutions that might reduce demand.

Water Efficient Data Centres
Applicant: Water Research Centre (WRc). Sponsor: MOSL
This project focuses on improving the water efficiency of cooling technologies in data centres. It aims to provide critical insights into water usage, identify sustainable cooling solutions, and establish a benchmarking framework. This will help data centres, retailers and wholesalers better understand and manage their water consumption.
 

CONTENTS

This month's articles - June 2025

Expert Forum

How much will the water sector have changed by 2030?

4

Pg

Report

Investment, resilience and water reuse lessons at the Global Water Summit

8

Pg

Report

PR24 finance arguments at the CMA

12

Pg

Report

Promoting a profession with purpose

16

Pg

Interview

Paul Gardner, Glanua, on breaking into the UK market

18

Pg

Analysis

A deeper dive into 2024 CSO data

22

Pg

News Review

Defra champions criminal investigation surge

28

Pg

Report

Ofwat's Cunliffe submission

30

Pg

Industry Comment

What might a system planner look like?

7

Pg

Report

Ofwat defends its final determinations

11

Pg

Report

Fitch forecasts AMP8 fortunes

14

Pg

Report

Latest trust scores

17

Pg

Report

Sixteen secure innovation funding

20

Pg

Industry Comment

Data center thirst mapped by region

26

Pg

Report

Reservoirs fast tracked as drought risk rises

29

Pg

Report

Little progress on climate readiness

31

Pg

Competition Watch

News Review

MOSL maps the smart meter rollout

Pg 32

Industry

Comment

Cunliffe submissions from retailers, MOSL, and the Strategic Panel

Pg 33

Industry

Comment

Four win take home funds from MIF4

Pg 34

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