Ofwat proposes £1.50-a-year bill increase to fund central innovation

Ofwat is consulting on new plans to fund innovation to the value of £200m across 2020-25 under PR19. That amount would cost customers £1.50 per year.

The regulator proposed two options for the 17 regulated water firms to access the funds.

The first was an annual innovation competition. Companies would put forward proposals and these would be assessed by an independent expert entity against a set of principles for financial support. Only those with successful bids would be awarded funding. Companies would pay into the pot in proportion to their size, based on their projected revenue for 2020-2025.

The second proposal was to provide a reward for the successful roll-out of innovative solutions at the end of the period as part of PR24, as either an alternative, or in addition to, a collectively funded competition.

Elsewhere in the consultation, which runs until 20 September, Ofwat told companies to consider establishing a sector-wide joint innovation strategy and a centre of excellence to provide relevant expertise. It added it would review how it regulates to better support innovation from the sector.