Ofwat is open to a different split of funding between the two streams in its new Water Efficiency Fund (WEF) than previously proposed. That was among the final strategic-level decisions from the regulator on the £100m pot.
Ofwat confirmed there would be two elements: a Water Efficiency Campaign (WEC) to support behaviour change, and a Water Efficiency Lab (WEL) to develop new water efficient technologies (see image). It previously indicated the funding split would respectively be 75:25, but following feedback has now said it won’t set fixed allocations at the start. “We remain committed to a well-resourced campaign and we do not expect the WEL to be any smaller than we initially proposed (£25m). However, we are open to a more even split,” the decision document said.
WEC
On the WEC, Ofwat confirmed it would not seek to provide the public with water efficiency information alone, but instead intended to support a sophisticated programme, tailored to different types of customer, and underpinned by expertise on a “strong theory of change”.
Ofwat said to manage risk, the WEC will start small, focusing initially on planning and evidence gathering, before scaling up.
It will be run by a competitively appointed Water Efficiency Campaign Delivery Body.
WEL
For the WEL, there will be annual competitions running against themes and challenge statements, but the lab will be flexible enough to accommodate bids external to this framework. There will be early support for work to harmonise with the smart meter rollout, including to standardise approaches across water companies.
There will be three pots within the WEL:
‘Source’ – up to £150,000 for early-stage projects.
’River’ – £150,000 to £500,000 for medium-sized projects.
’Delta’ – £500,000 to £2m for proven, wide-scale projects.
The WEL will share a competitively appointed Competition Design and Delivery Partner with the Innovation Fund, as well as a common Evaluation Partner support the review of the funds.
Ofwat said applicants would be able to apply to both funds. “The existence of the WEF does not preclude Innovation Fund support being available for projects looking at water efficiency; especially where that project is focused on innovation.” There is no blanket requirement under the WEL for bidders to partner with water companies, though the paper said collaboration is encouraged and may lead to stronger applications.
Governance
Advisory Panels will oversee the WEF. Ofwat said its tasks for 2025 include finalising governance, onboarding partners and designing competitions.
The objectives of the WEF remain unchanged from those set out in consultation: “We are aiming to achieve a significant reduction in public water supply demand in England and Wales through effective, large-scale, innovative and insightful projects. These projects should be additional to existing water management plans and are likely to involve collaboration across sectors.”
As with the Innovation Fund, water companies will contribute to the WEF based on the size of their customer bases. Intellectual property and data sharing will be managed to ensure open access and collaboration, while conditions and sanctions will be available to protect the funds and ensure compliance.
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