Excerpts from the latest edition of The UK Water Report.

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White hope

Despite excitement about the White Paper, the sector expects reform to be slow and AMP8 delivery to be behind – leading to a sneaking suspicion there will be no quick fix for trust.

By Karma Loveday

The Water White Paper has energised the sector, securing a positive response to, and ideas about, the reformed water landscape. But make no mistake, the sector is anticipating a tough year ahead. We asked The UK Water Report Expert Forum for views on prospects for 2026 – given it is a year of change.

If the ultimate objective of reform is to restore trust in water, the short term prospects are bleak. At the most optimistic, Forum members saw only minimal improvements as feasible this year.

One member offered this comprehensive view on prospects for trust: “Only limited progress will have been made restoring trust by year-end. While there will be visible signs of intent—tougher rhetoric from regulators, clearer expectations on performance, and early legislative movement; these won’t yet translate into outcomes that customers can see or feel. Ongoing incidents, including supply interruptions like those we are seeing currently at South East Water, undermine confidence and reinforce the perception that systemic issues remain unresolved. Trust in water is rebuilt through consistent delivery: reliable supply, fewer pollution incidents, honest communication, and clear accountability when things go wrong. By the end of the year, the sector may have stabilised the narrative, but it won’t yet have earned back trust. That will take sustained performance over several years, not statements, plans or reforms alone.”
Why is the outlook so bleak? Three main factors are in play: AMP8 falling behind schedule; reform will be slow; and the financial situation at Thames remains an unknown.

“By the end of the year, the sector may have stabilised the narrative, but it won’t yet have earned back trust. That will take sustained performance over several years, not statements, plans or reforms alone."

The critical components of reform

Anglian Water, in partnership with Oxera, has developed a suite of papers on priority issues that it hopes will help the Government progress the water reform programme.

By Darren Rice, regulation director, Anglian Water

The White Paper, like the Cunliffe Review that preceded it, has complex and far-reaching implications. It will take time to deliver all the commitments it contains, and – as the White Paper recognises – not everything can or should be implemented at once.

We have identified four initial key areas that the reform programme needs to focus on to resolve the existing challenges with regulation and deliver the government’s long-term objectives for the sector. These are:

A regulatory framework for attracting investment which ensures companies can finance much needed investment across the sector.
Aligning institutions to ensure a more joined up approach to planning, regulation and enforcement.
A means of monitoring progress against long-term objectives based on a balanced scorecard approach.
An effective transition to the new arrangements, which maximises the likelihood of reform’s success.

We have developed a series of short papers available on the Anglian Water website to help explore these topics in more detail and support the government in its reforms to deliver a resilient, investable, coherently planned, and publicly trusted water sector.

The critical test will be how these changes come together for PR29. The Government has set a clear direction which in-flight regulatory processes must align with. That also means standing up the new regulator as quickly as possible to enable them to lead design of the next price review. The Government has taken a bold step in grasping these problems and it must now follow through.

“The Government has taken a bold step in grasping these problems and it must now follow through.”

Disorder, disorder

Securing a predictable, stable regulatory framework that is conducive to long term investment will be a struggle, given the zealotry of politicians on water matters.

By Karma Loveday

Politicians’ predisposition to intervene in water affairs looks set to continue – possibly even to worsen in the coming years – and will make the Holy Grail of stable, predictable regulation hard to achieve.

That was among the key lines of discussion aired at a meeting hosted by Economic Insight on the future regulatory model for water.

The starkest testimony was provided by Lord Moynihan, speaking purely in a personal capacity.

He characterised the years since water privatisation in 1989 – which he co-led on behalf of the Thatcher Government – as “nationalisation by the back door”. Since the turn of the century, the light touch regulation of the day has been piled high with additional requirements.

He said: “Every time it's reviewed in politics, by politicians, they look for additional regulatory responsibilities, additional requirements to be imposed on the regulator. And the idea that is going to change is, I think, something that should not be factored into thinking…”

He added: “This zealotry of politicians…is disadvantageous to long term investment in terms of infrastructure improvements. It is disadvantageous to the sensible balance that needs to be struck between the consumers and the regulator and water companies and governments. And unless we reconcile those and try and reconcile them with recognition that politicians are going to intervene, may want to intervene more, we will fail in getting the right structure.”

“This zealotry of politicians…is disadvantageous to long term investment.”

A new vision for water: the end of the beginning for investors

The White Paper has affirmed a direction of travel that has already begun to restore confidence in UK water for investors.

By Verity Mitchell

The Government, through its public commitment to effect change and stop the blame game, has already changed the investment climate. The reality is that both equity and debt have been pledged to water companies since September 2023 to underpin the transformational levels of investment expected for AMP8.

Now there are new finance aspects of the White Paper that merit comment. Some of these are:

In terms of regulatory accounting changes, the decision to end totex and return to capex, opex and capital maintenance will provide more clarity as to when these different elements will be funded, increasing financial transparency.
The UK Water (Special Measures) Bill has resulted in zero bonuses for six water companies. The likelihood that this year more will follow from legacy underinvestment is becoming a disincentive to retaining senior management of well-managed companies. Might this sledgehammer legislation be modified under the White Paper’s new regime for accountability?
The exploration of whether green bonds could support greater investment does not make the water sector more attractive if the risk is unchanged. Companies have issued green bonds but, with the ratcheting down on negative rhetoric by government, are now accessing significant amounts of conventional bond finance.
Accessing public market or bilateral bank finance doesn’t appear to be the problem, rather the investability of the sector itself. If the government wants the sector to access more, cheaper debt, it will have to provide guarantees or other undertakings as it did with Thames Tideway.
Of greater challenge is the new equity needed to support the debt and the level of equity risk premium required, not least because of the non payment of dividends by several companies. This is either because of debt covenant lock-ups or a commitment by management to withhold shareholder distributions.

“Might the Special Measures sledgehammer legislation be modified under the White Paper’s new regime for accountability?”

A technical bridge between principle and practice

Mike Rose offers UKWIR’s research portfolio and expertise to expedite implementation of water reform.

By Karma Loveday

As chief executive of UK Water Industry Research (UKWIR), Mike Rose was always going to hone in, when reading the Water White Paper, on the role of research in the reformed environment – as well as taking in the broader thrust of policy.

He first observes that research is mentioned only once, and hopes it features more prominently as the reforms move into delivery. But on a less literal reading of the Paper, he sees huge opportunity – and indeed necessity – for the sector to harness the power of research to help deliver the outcomes the Government wants to see.

Like almost all commentators, Rose views the Transition Plan and the greater detail it will provide as critical now to put flesh on the bones of the policy choices. He believes UKWIR could play a valuable role as a “technical bridge” between principle and practice, to help accelerate the implementation of reform. After all, reinventing the wheel would slow progress and introduce unwelcome bureaucracy at at time when change is urgently needed at pace to restore trust.

Rose explains the reasons for his view. First, UKWIR’s research catalogue is extensive, highly relevant and readily accessible. In all the technical areas that the White Paper wants to pursue, UKWIR has a solid base of research available immediately – from common frameworks for asset health and resilience, to strategies for water reuse and emerging chemicals. Rose comments: “We are a research engine… It feels like the time is now for us, because the White Paper is asking for these things. We’re just saying, ‘look over here, a lot of the answers already exist’.”

Second, UKWIR’s model is inherently collaborative and already exhibits the sort of multi-stakeholder approach that the White Paper champions.

“Look over here, a lot of the answers already exist."

Glasgow glow up

The World Water Congress home team wants to transform how the world views water.

By Karma Loveday

How exactly do you prepare to host 10,000+ people from the world’s water community for four days, and put on a powerful, meaningful and interesting programme of events and experiences? That is the challenge – or perhaps more accurately, the opportunity – that the UK team supporting the IWA World Water Congress being held in Glasgow in October is fully leaning into now that 2026 is underway.

At the strategic level, Scottish Water’s chief executive Alex Plant is sharing the presidency of the Congress with Peter Simpson. As such, he is acting as both strategist and coalition‑builder for Glasgow 2026.

Plant sees the Congress as a once‑in‑a‑lifetime chance, not just to showcase the UK’s strengths in water, but to bring governments, regulators, investors and other sectors together to think system‑wide about climate, nature, growth and health, and to leave a lasting positive legacy. He says: “The things we'll be talking about here are important, whether you live in Glasgow, Guadalajara or Guangzhou.”

At the programme level, Lorraine Bruce is in the hot seat. Bruce says that there are no significant “red flags” on her radar. It is more a job of ongoing diligence – “breaking things down into manageable chunks per day, per week, per month, and making sure that they remain on track”. She shares: “The key is spinning many plates, having everything on your radar and keeping everything and everyone on track. It requires you to be assertive when you need to be and, with the big picture in mind, sometimes challenge and influence thinking.”

“The things we'll be talking about here are important, whether you live in Glasgow, Guadalajara or Guangzhou.”

Competition Watch

Jeremy Atkinson

Bob Downes

New frontiers

After 18 years of expertly running the Scottish market, CMA Scotland is pivoting to pursue ‘frontier performance’ in crucial areas like cyber security and using data as a resource.

By Karma Loveday

For almost 18 years, Scotland’s Central Market Agency (CMA) has professionally and diligently run the Scottish non-household retail market – performing settlement, maintaining central systems, improving data, managing market entry and updating the market codes. It has more than proved its competence to pioneer and sustain a world-first competitive water space.

Now, the organisation is intent on moving "beyond compliance” to deliver “frontier performance” under a new strategic plan. It is early days, but top-notch cybersecurity and management of the technology stack have emerged as an initial area of focus. Elsewhere, the plan incorporates an intent to innovate in the context of broad trends relevant for the market: artificial intelligence, data science, resilience and water resource constraints.

CMA Scotland wants to leverage its corporate history and the data it holds for the benefit of the market and the wider water sector, and to be recognised as a trusted expert in relevant fields. In the face of mounting pressures from a changing climate and economic growth, it also sees benefit in a closer relationship with the maturing English market.

Leading the charge are CMA Scotland’s long standing chief executive, Jeremy Atkinson, and new chair Bob Downes.

“CMA Scotland wants to leverage its corporate history and the data it holds for the benefit of the market and the wider water sector.”

Sophia Goring

Jo Dow

Pervasive positivity

Business Stream’s vision to Make A Positive Difference has become central to its identity. Jo Dow and Sophia Goring see competitive advantage in that, but also the opportunity to leave a positive societal legacy.

By Karma Loveday

Launched six years ago, Business Stream’s Make A Positive Difference (MAPD) vision was initially an internal initiative – a way to inspire and enable colleagues to contribute to positive environmental, social and customer-focused outcomes, aligned to the United Nations Sustainable Development Goals. The launch in itself was “a groundbreaking moment for us,” chief executive Jo Dow says – the first opportunity since the opening of the Scottish and then the English market to take the time to reflect on their wider contribution, purpose and legacy.

But the response to and impact of MAPD over time has been so beneficial that the vision has now evolved to become “really embedded in our ethos and day-to-day operations,” Dow says – to the point that it has become central to Business Stream’s identity, and the basis of a differentiated, evidence-based and future-ready proposition for the non-household water markets in Scotland and England. Sophia Goring, head of ESG, comments: “It literally impacts everything we do.”

“Making A Positive Difference literally impacts everything we do.”

Below and beyond

Baringa research finds multiple demand reduction interventions could help businesses significantly beat water use targets.

By Karma Loveday

By deploying a combination of interventions, non-household customers could be helped to save more water than specified in the Environment Act targets.

That’s according to a report from Baringa commissioned by the Strategic Panel and the Retailer Wholesaler Group’s (RWG) Water Efficiency Subgroup on how to incentivise business customers to cut demand.

Baringa identified eight strategies that need to be deployed in combination:
• Using smart meter data to identify wasteful continuous flow.
• Setting demand reduction targets for users.
• Enabling/requiring non-potable water to be used for purposes such as cooling and cleaning.
• Tariff reform.
• Introducing a usage-based surcharge on customers to fund targeted water efficiency investment.
• Limiting business usage in water-stressed zones.
• Linking access to finance to water efficiency.
• Recognition and rewards for efficient use.

Baringa found that, while no single intervention would be sufficient alone, if deployed together, demand could be cut by 14% by 2038 (beating the 9% statutory target) and by 21% by 2050 (beating the 15% statutory target). The report noted: “Exceeding the current 15% target would provide the industry with necessary headroom to supply growing sectors of the economy, such as new homes and data centres.”

"While no single intervention would be sufficient alone, if deployed together, demand could be cut by 14% by 2038 (beating the 9% statutory target) and by 21% by 2050 (beating the 15% statutory target)."

Expert analysis of the UK water sector

Summit Report now available!

A sneak peak at this month's top stories

White hope

Despite excitement about the White Paper, the sector expects reform to be slow and AMP8 delivery to be behind – leading to a sneaking suspicion there will be no quick fix for trust.

“By the end of the year, the sector may have stabilised the narrative, but it won’t yet have earned back trust. That will take sustained performance over several years, not statements, plans or reforms alone."

The critical components of reform

Anglian Water, in partnership with Oxera, has developed a suite of papers on priority issues that it hopes will help the Government progress the water reform programme.

“The Government has taken a bold step in grasping these problems and it must now follow through.”

Disorder, disorder

Securing a predictable, stable regulatory framework that is conducive to long term investment will be a struggle, given the zealotry of politicians on water matters.

“This zealotry of politicians…is disadvantageous to long term investment.”

A new vision for water: the end of the beginning for investors

The White Paper has affirmed a direction of travel that has already begun to restore confidence in UK water for investors.

“Might the Special Measures sledgehammer legislation be modified under the White Paper’s new regime for accountability?”

A technical bridge between principle and practice

Mike Rose offers UKWIR’s research portfolio and expertise to expedite implementation of water reform.

“Look over here, a lot of the answers already exist."

Glasgow glow up

The World Water Congress home team wants to transform how the world views water.

“The things we'll be talking about here are important, whether you live in Glasgow, Guadalajara or Guangzhou.”

Competition Watch

New frontiers

After 18 years of expertly running the Scottish market, CMA Scotland is pivoting to pursue ‘frontier performance’ in crucial areas like cyber security and using data as a resource.

“CMA Scotland wants to leverage its corporate history and the data it holds for the benefit of the market and the wider water sector.”

Pervasive positivity

Business Stream’s vision to Make A Positive Difference has become central to its identity. Jo Dow and Sophia Goring see competitive advantage in that, but also the opportunity to leave a positive societal legacy.

“Making A Positive Difference literally impacts everything we do.”

Below and beyond

Baringa research finds multiple demand reduction interventions could help businesses significantly beat water use targets.

"While no single intervention would be sufficient alone, if deployed together, demand could be cut by 14% by 2038 (beating the 9% statutory target) and by 21% by 2050 (beating the 15% statutory target)."

CONTENTS

This month's articles

Summit Report now available!

A sneak peak at this month's top stories

White hope

Despite excitement about the White Paper, the sector expects reform to be slow and AMP8 delivery to be behind – leading to a sneaking suspicion there will be no quick fix for trust.

“By the end of the year, the sector may have stabilised the narrative, but it won’t yet have earned back trust. That will take sustained performance over several years, not statements, plans or reforms alone."

The critical components of reform

Anglian Water, in partnership with Oxera, has developed a suite of papers on priority issues that it hopes will help the Government progress the water reform programme.

“The Government has taken a bold step in grasping these problems and it must now follow through.”

Disorder, disorder

Securing a predictable, stable regulatory framework that is conducive to long term investment will be a struggle, given the zealotry of politicians on water matters.

“This zealotry of politicians…is disadvantageous to long term investment.”

A new vision for water: the end of the beginning for investors

​The White Paper has affirmed a direction of travel that has already begun to restore confidence in UK water for investors.

“Might the Special Measures sledgehammer legislation be modified under the White Paper’s new regime for accountability?”

A technical bridge between principle and practice

Mike Rose offers UKWIR’s research portfolio and expertise to expedite implementation of water reform.

“Look over here, a lot of the answers already exist."

Glasgow glow up

The World Water Congress home team wants to transform how the world views water.

“The things we'll be talking about here are important, whether you live in Glasgow, Guadalajara or Guangzhou.”

Competition Watch

New frontiers

After 18 years of expertly running the Scottish market, CMA Scotland is pivoting to pursue ‘frontier performance’ in crucial areas like cyber security and using data as a resource.

“CMA Scotland wants to leverage its corporate history and the data it holds for the benefit of the market and the wider water sector.”

Pervasive positivity

Business Stream’s vision to Make A Positive Difference has become central to its identity. Jo Dow and Sophia Goring see competitive advantage in that, but also the opportunity to leave a positive societal legacy.

“Making A Positive Difference literally impacts everything we do.”

Below and beyond

Baringa research finds multiple demand reduction interventions could help businesses significantly beat water use targets.

"While no single intervention would be sufficient alone, if deployed together, demand could be cut by 14% by 2038 (beating the 9% statutory target) and by 21% by 2050 (beating the 15% statutory target)."

CONTENTS

This month's articles

The White Paper has affirmed a direction of travel that has already begun to restore confidence in UK water for investors.