PR24: CCW calls for bigger water efficiency fund

Delivering a step change in water efficiency will require a greater level of funding, the water watchdog has warned after Ofwat proposed a £200 million pot within the upcoming price review.

CCW said efforts and resources should be coordinated with input from outside the water sector to lower demand in a sustainable and significant way.

“There needs to be a greater level of funding for the fund to deliver the step change required,” CCW said in response to Ofwat’s proposals for a dedicated water efficiency pot at PR24.

“The challenge of meeting the supply/demand balance gap is huge, and will require significant ongoing investment. There is a danger that without appropriate funding, oversight, coordination and leadership the sector will continue to do more of the same, which will not bring about the step change in attitudes and behaviours required.”

Ofwat said an efficiency fund would be similar to the innovation fund launched at the start of the current asset management period (AMP7). Schemes and initiatives with the potential to be scaled up can bid for a share of the £200 million over the five years to 2030.

CCW endorsed the proposal but stressed the need for leadership and oversight to make sure suitable ideas are taken forward at pace and scale.

“We want to ensure that there is a commitment to doing more to inform the public so they too understand why saving water is so important and the part they are expected to play,” the group said.

CCW previously called for a dedicated fund and resourcing targeting demand reduction, which it suggested naming ARID for Accelerated Reduction in Demand.

Following Ofwat’s consultation on the water efficiency fund, CCW urged for it to be converged with ARID to have maximum potential impact.

ARID was proposed by CCW to address the void between expectation and action on demand reduction. It noted that companies’ medium and longer term plans for ensuring resilience of future supplies require significant reduction in usage without a clear plan to do make that happen.

It said ARID would focus on collaboration, coordination and provide leadership.

For the first time, as part of PR24, water companies will be set demand reduction targets for household and business consumption. All business plans include ambition to rollout smart metering devices instead of older style meters.

Ofwat said its fund would make money available for a small number of large initiatives, however CCW challenged this approach as too risk averse. “If effective interventions could be easily identified there would be no need for the fund,” it said and argued there must be space for risk and failure to any scheme put forward.