Ofwat calls for cost information from regional water resource groups

Ofwat has called on regional water resource groups to ensure detailed information on option costs, benefits and tradeoffs is available when regional plans are published in draft in autumn.

Responding to the emerging plans of each of the five regional groups published in January, Ofwat first acknowledged the effort and achievements of those involved, but went on to list things it wants to see when the plans reach their next stage. These included:

• detailed costings – Among other things, Ofwat pointed out the plans will help inform which strategic solutions progress beyond RAPID’s Gate 2: “This makes the approach, robustness and transparency of decision making even more important";

• environmental and drinking water quality risks – these should be identified and mitigations costed for schemes where funding will be sought in PR24 business plans;

• glide paths on demand management – “This should include the potential for coordination of action at a regional and national level and considerations of the benefits that could bring. Where your future initiatives to reduce personal consumption to 110 litres/head /day are reliant on government policy, we ask that you clearly articulate which policies your assumptions rely on, and your assumed dates of implementation.” Ofwat also said attention should be paid to the non household sector;

• profiling of changes to meet requirements – including around drought resilience, personal consumption and leakage – to optimise outcomes;

• abstraction changes – “Regional groups should work with environmental regulators to reduce the uncertainty around these figures and profile required changes across the planning period before the next plans are published”;

• deliverability – Ofwat pointed out the plans propose a step change in investment and that the groups must “think carefully about the deliverability of the plans from a practical perspective. This includes current supply chain constraints and affordability concerns”;

• options – some of the plans include insufficient options in comparison to the projected needs; and

• multi-sector contributions – third parties who will benefit from a solution must contribute a fair share of costs according to their own responsibilities and the benefits they realise.

Ofwat also provided feedback specific to each regional group.