Water efficiency campaign to receive £75m backing

Ofwat has proposed directing £75 million, or three-quarters, of the water efficiency fund to centralised campaigning to encourage demand reduction by customers.

The remaining £25 million, of the £100 million fund, would be spent on a water efficiency lab to foster innovative approaches to curbing consumption.

For the next asset management period (AMP8), the regulator said the fund would be run to help lower usage in response to the changing climate, population growth and abstraction pressures which place strains on the country’s water resources.

Over five years, from 2025-30, the behaviour change campaign would be a “coordinated, high profile and expertly run” approach to change water use habits in England and Wales. It would raise awareness of the need to use less water and explain the benefits this would bring for households, communities and the environment.

The smaller portion of the fund would be akin to the regulator’s innovation fund, which it launched in 2019 as part of the current price review, but focused on addressing core challenges around demand reduction.

Ofwat unveiled details of its plans for the water efficiency fund in a second round of consultations, after receiving more than 80% support for the fund in its initial scouting.

The regulator said some respondents to its original proposals had said £100 million was insufficient, and no one disagreed with the need for it. The fund will cost billpayers an average of 62p per year.

“Under the government’s Environmental Improvement Plan, we are aiming to achieve a consumption target of 110 litres of water per head per day, down from about 146 litres per head per day currently,” Paul Hickey, senior director at Ofwat, said.

“We have seen customers in England and Wales increasingly want to make environmentally conscious choices, and we want to empower them to be able to do that.”

The majority of those who had engaged with Ofwat about the fund (70%) said dividing it into segments was a good idea, though caution was expressed against creating silos between projects.

Ofwat said: “We would envisage up to £75 million dedicated to this element in total, approximately £15 million per year. We estimate this would be sufficient to target three changes to behaviour per year though costs and benefits may be lower at the start of the programme as the campaign is being established.”

Large scale behavioural change was identified as the most popular single intervention, with 60% of respondents suggesting this was the way a fund could best achieve water savings.

Just 8% of respondents highlighted the role that water retailers and new appointments and variations (NAVs) have to play in driving usage down.

By 2050 there could be a deficit of up 400 megalitres daily, according to Environment Agency figures, if no action is taken. The sector, its regulators and government are working to drive down leakage as well as bring novel resources into supply. However demand reduction has hitherto not received sufficient resourcing to make an impact.

The consultation on how the water efficiency fund should run is open until 25 June.