The forecast deficit over the next decades demonstrates that a range options need to be developed and delivered for a secure, resilient, environmentally sustainable supply of water to support a growing population and economy and protect the environment. The industry needs to consider innovative and flexible options, including multi sector solutions, that can adapt to a changing and challenging future. Water companies and regional groups must continue to take a twin-track approach, delivering new supplies and reducing water demand. They must reduce how much water is lost through leakage and drive more efficient water use by households and businesses. In tandem, they must develop new supply options such as water recycling, desalination and new reservoirs. The latest round of and provide a positive step forward. Once implemented the plans should: improve resilience to extreme droughts provide a secure supply of water for a growing population and thriving economy ensure that companies are prepared for the impacts of future climate change set out a longer-term plan and ambition to protect and improve the water environment rapidly reduce the amount of water lost to leakage help people and businesses to reduce the amount of water used It is critical that water companies deliver the ambitious demand management plans and new resource options on time to ensure a secure positive supply demand balance. The companies need to engage with stakeholders and local communities and actively identify and mitigate risks such as supply chain issues. If delivery is unsuccessful or not timely, we will face growing water supply deficits, restrictions on economic growth and increased pressure on the environment. Figure 22: Options included in water company revised draft water resources management plans Year Water efficiency option benefits (government-led) Water efficiency option benefits (water company-led) Leakage option benefits Supply-side option benefits Grand total 2025-26 9.53 107.37 81.17 206.76 404.82 2026-27 37.09 202.49 125.81 214.9 580.29 2027-28 53.7 309.19 169.55 250.59 783.03 2028-29 72.28 416.93 210.21 268.6 968.02 2029-30 91.2 525.92 303.95 279.32 1200.39 2030-31 119.21 619.1 346.16 389.44 1473.91 2031-32 149.64 717.01 381.95 351.21 1599.81 2032-33 180.65 796.35 412.69 434.3 1823.99 2033-34 215.44 874.52 442.32 447.24 1979.53 2034-35 256 944.46 472.45 447.41 2120.32 2035-36 316.13 1000.84 517.52 697.67 2532.16 2036-37 378.34 1058.78 551.7 800.68 2789.5 2037-38 445.78 1112.7 601.99 801.04 2961.51 2038-39 513.78 1155.8 641.15 801.37 3112.1 2039-40 582.47 1197.81 676.72 1257.91 3714.92 2040-41 642.67 1227.92 700.72 1536.26 4107.56 2041-42 706.57 1259.55 725.01 1540.75 4231.88 2042-43 771.05 1290.21 748.79 1553.25 4363.3 2043-44 828.02 1319.75 771.58 1583.25 4502.6 2044-45 881.49 1344.05 793.81 1631.74 4651.08 2045-46 914.07 1365.6 814.92 1684.75 4779.32 2046-47 946.72 1385.73 834.02 1684.75 4851.22 2047-48 979.93 1405.4 853.31 1684.75 4923.39 2048-49 1013.42 1424.18 870.68 1684.76 4993.02 2049-50 1046.67 1442.19 890.8 1806.75 5186.42 Figure 22 shows how different option types are planned to be delivered over the coming decades. There is a step-change of benefits provided from supply options from the 2040s, with significant reliance on the delivery of demand management prior to this, over the next 15 years. Government and regulators will need to work together to ensure that policies, legislation, governance and 6.1 The need for resource development Given the pressures and demands for water, water companies have proposed to develop new supply options to maintain secure and resilient water supplies. Water company water resources management plans now contain solutions, many of which are being This is one of the largest programmes of water resources investment since plans became statutory, totalling approximately 8 billion. This includes investment to progress with actions to reduce demand plus actions which will pave the way for 10 new reservoirs, 1 reservoir enlargement, 9 water transfer schemes, 2 desalination schemes and 1 minewater treatment scheme. There are around 50 new supply options that will each provide 10 Ml/d or more to supply included in water resources management plans over the next 25 years. Figure 23: Supply options included in water company revised draft water resources management plans. Year Rounded 2025-26 207 2026-27 215 2027-28 251 2028-29 269 2029-30 279 2030-31 389 2031-32 351 2032-33 434 2033-34 447 2034-35 447 2035-36 698 2036-37 801 2037-38 801 2038-39 801 2039-40 1258 2040-41 1536 2041-42 1541 2042-43 1553 2043-44 1583 2044-45 1632 2045-46 1685 2046-47 1685 2047-48 1685 2048-49 1685 2049-50 1807 For 2031-32, some reductions reflect sustainability changes to abstraction licences and the removal of unsustainable drought options from some WRMPs . For 2039-40, resilience to a drought which has a 0.2% chance of occurring in any year is required by 2040. Figure 23 shows how supply side options are planned to be implemented between 2025 and 2050. There is a step-change in delivery in the mid-2030s and again in the early 2040s. This highlights the reliance on demand management measures in the period up to these dates. Companies will be working closely with regulators, including the Regulators' Alliance for Progressing Infrastructure Development ( RAPID ) for Strategic Resource Schemes and stakeholders during the development of schemes and should be anticipating and mitigating any supply chain issues. 6.1.1 Identification and assessment of strategic resource options RAPID has been established to help scrutinise and assess schemes which are likely to be needed to address forecast deficits. It is intended to enable the development of new major water infrastructure projects to help address the nation's water needs. To do this, RAPID : aims to improve interconnectivity and tests for alternative options supports regional water resources planning supports Information on the current list of Strategic Resource Options ( SROs ) being considered and their associated timelines can also be found on the RAPID website. At the time of publication of the National Framework, the main options being considered include those presented in Figure 24. Figure 24: Solutions being considered in the RAPID Programme, December 2024 Note that NRW and Welsh Government are involved with RAPID regarding schemes from Wales to England. Water resources infrastructure is essential national infrastructure. We want it to be more resilient to current and future risks from flooding and coastal change.
We expect companies' strategic water resource options to be designed to be resilient to future flood and coastal risk, and where feasible to deliver wider flood risk management benefits. 6.1.2 The need for additional new options There are a number of options included in water company plans, with many strategic options already being assessed through the RAPID programme. Despite this, more new options need to be identified and assessed as a key element of the adaptive planning process. This is to allow for future flexibility should there be additional demands or should schemes deliver less water than planned or later than intended. will need to work collaboratively with RAPID and its constituent regulators and with water companies to explore and identify more options. This will ensure that there is innovation, greater flexibility and choice. Options will need to be developed for both the short term and beyond the current planning horizon. There is a need to build on traditional options by working across water company boundaries and between sectors, particularly with the energy sector. Regional groups are well placed to explore, assess and facilitate a larger number of options, to take them from unconstrained to feasible. This National Framework aims to not only assess future water needs but also to understand how the nation can meet those future water needs. The modelling work improves our understanding of the potential options available to address future water deficits in England, particularly in the face of significant environmental needs and future non-public water supply needs related to energy (hydrogen, carbon capture) and agriculture. This work builds on work undertaken in the first National Framework in 2020 and through RAPID in 2021. The modelling uses a national scale model that enables identification of potentially cost-efficient combinations of water supply options and water transfers nationally. It provides a top-down national view of how water companies could work together to cost effectively meet estimated annual water demands, which would then be explored further with more local knowledge and granularity. Our approach to water resources modelling of options is detailed in a supporting technical report which will be and Environmental Improvement Plan ( EIP ) set out ambitious targets to achieve a reduction in water consumption per capita and for companies, including New Appointments and Variations ( NAVs ) to reduce leakage. The latest WRMPs set out how this will be achieved through demand management strategies alongside expected reductions from government interventions. (New Appointments and Variations are limited companies which provide a water or sewerage services (or both) to customers in an area which was previously provided by the incumbent monopoly provider.) Water companies have put forward ambitious demand management programmes in their plans. By 2049-50, reduction in water consumption and leakage is expected to address over 65% of the supply demand balance deficit across England. Not only is the level of reduction ambitious, but the pace of change needed is vital. Figure 25: Demand management and leakage as a percentage of total measures included in water company revised draft water resources management plans Year Demand management and leakage options as a percentage of total 2025-26 48.93 2026-27 62.97 2027-28 68 2028-29 72.25 2029-30 76.73 2030-31 73.58 2031-32 78.05 2032-33 76.19 2033-34 77.41 2034-35 78.9 2035-36 72.45 2036-37 71.3 2037-38 72.95 2038-39 74.25 2039-40 66.14 2040-41 62.6 2041-42 63.59 2042-43 64.4 2043-44 64.84 2044-45 64.92 2045-46 64.75 2046-47 65.27 2047-48 65.78 2048-49 66.26 2049-50 65.16 Figure 25 shows that demand management and leakage form up to 79% (2035) of all measures in water company plans. It also shows how demand management and leakage reduction form over 60% of the ongoing solution through the current planning horizon. We expect companies to be delivering on these ambitions where action is under their control, recognising that many reductions in per capita consumption will rely on behavioural change. It is essential the savings assumed are realised. Companies need to provide confidence to both customers and regulators that actions are being taken to reduce demand for water. Monitoring and tracking the progress made on demand management will be essential to ensuring the appropriate pace of delivery and for companies to adapt and take alternative actions if assumed demand savings are not realised. Leakage reduction, smart metering, water efficiency labelling and helping customers in their homes and businesses to be more efficient with their water use will all be important ways to reduce demand for public water supplies. Reducing leakage helps conserve water supplies and lower the energy used to treat and pump the water. metering programmes, particularly in areas of greatest water stress will be vital to drive behaviour change, enabling tariffs to be introduced which provide the right pricing signals whilst also protecting the vulnerable. Smart metering will also help to reveal and help enable customers to address wastage through plumbing losses in homes, businesses, public sector buildings and in industry. We expect water companies to continue to look for new solutions and innovations to help reduce demand.
Figure 26: Benefits assumed from government enabled water efficiency policies across water company revised draft WRMP24 plans, in millions of litres per day Year Government led Water company led Total 2025-26 9.53 107.37 116.9 2026-27 37.09 202.49 239.58 2027-28 53.7 309.19 362.89 2028-29 72.28 416.93 489.21 2029-30 91.2 525.92 617.12 2030-31 119.21 619.1 738.31 2031-32 149.64 717.01 866.65 2032-33 180.65 796.35 977 2033-34 215.44 874.52 1089.96 2034-35 256 944.46 1200.46 2035-36 316.13 1000.84 1316.97 2036-37 378.34 1058.78 1437.12 2037-38 445.78 1112.7 1558.48 2038-39 513.78 1155.8 1669.58 2039-40 582.47 1197.81 1780.28 2040-41 642.67 1227.92 1870.59 2041-42 706.57 1259.55 1966.12 2042-43 771.05 1290.21 2061.26 2043-44 828.02 1319.75 2147.77 2044-45 881.49 1344.05 2225.54 2045-46 914.07 1365.6 2279.67 2046-47 946.72 1385.73 2332.45 2047-48 979.93 1405.4 2385.33 2048-49 1013.42 1424.18 2437.6 2049-50 1046.67 1442.19 2488.86 Leakage, smart metering, a planned building regulations review can be all be actioned and with the government's launch of the mandatory water efficiency label scheme for domestic water products and review of minimum standards, these actions will reduce demand and are important steps to enable consumers to make water efficient choices and to drive behavioural change. The government has also committed to reviewing building regulations to tighten the water efficiency standards in new developments. Ofwat has established its Water Efficiency Fund ( WEF ) of 100 million to support the innovation and collaborative work needed by the water companies to be able to meet the water demand targets set out in the government's Environmental Improvement Plan and in the Environment Act. We expect companies to engage with the WEF to develop and implement demand management strategies and look to innovate in the future. 6.2.1 Leakage reduction Leakage wastes water and is a serious reputational issue for water companies and the government. People do not understand why they should use less water when so much is lost from water companies' pipes and from customer pipework. Managing leakage needs constant action and investment from water companies to prevent it increasing. Although nationally the UK 's leakage performance is about average in Europe (at about 19% of water into supply), other countries have much lower levels. Leakage wastes both water and energy from treatment and pumping. It means increased costs and carbon emissions for water companies. It means more water than necessary is taken to meet demand which is a risk to the environment. Although water lost from buried water pipes does return to the environment, this may not be to the same river or aquifer from which it was originally abstracted and there will be a time difference. The treatment process may also mean that the water chemistry of potable water can be substantially different from that in the river or aquifer to which it returns. We expect companies to reduce leakage. has set companies the target of reducing leakage by 50% by 2050. The water companies collectively committed to this and delivery of the WRMP24 plans would achieve this nationally. This will play an important part in reducing demand and helping ensure a secure supply balance in the future. It is vital that water companies deliver against this commitment, and that in doing so, they embrace new technologies, such as the use of AI to help detect leaks. 6.2.2 Smart metering and tariffs Smart metering is fundamental to delivering the scale of water efficiency savings needed. Widespread roll out of smart metering will: enable water users (in both households and non-households) and water suppliers to better understand levels of water use and patterns of demand, in near real-time underpin new tariffs to incentivise water use reductions whilst protecting the vulnerable reveal plumbing losses and leakage on the customer side of the meter, helping to drive further reductions in this area monitor the impacts of demand management activities and building standards Although over 60% of households pay for their water by metered volume, the rest can use as much as they like for a fixed price based on the historic rateable value of their homes. Water companies plan to charge over 90% of their customers by metered volume by 2050. Current proposals in WRMPs and Regional Plans are for household smart metering to increase from the current estimated 12% to 51% by 2030, 75% by 2040 and 77% by 2050. For non-household properties the plans show an increase in smart metering from under 10% currently, to 55% by 2030, 73% by 2040 and 74% by 2050. The largest ever roll out of approximately 10 million smart meters by 2030 across households and non-households has the potential to revolutionise people's understanding of and use of water. We are at a critical point to ensure that the benefits are maximised. We expect to see widespread deployment of smart metering, prioritised in areas of greatest water stress. Water companies will need to ensure that infrastructure is in place to enable the full benefits of , including making consumption data available to customers to influence behavioural change. Smart meters will capture water use in more detail, including daily and sub daily data and will help both customers and companies better understand opportunities for water savings. Water efficiency campaigns can be better targeted using near-real time usage data. Smart meters also help more quickly identify leaks within the network and customer supply pipes. We expect companies to proactively manage and mitigate supply chain risks of such a large-scale metering roll out across the industry. It is essential that safeguards are in place to ensure that low-income and other vulnerable customers are protected, and their water and sewerage services remain affordable. Ofwat's ask water companies to work "with government and regulators on smart metering coordination and standards. Companies should engage actively in this, and the work should be completed well ahead of 31 March 2030". Ofwat will be working with other regulators and government, and expect water companies to engage with them, as part of a new to improve roll out efficiency and effectiveness of benefits from smart water metering.
To ensure that the full benefits of smart metering are realised there are several priorities that government, regulators and water companies will need to address: appropriate policies to support and enable delivery, including standards proactive supply chain engagement data strategy to capture and process information and making this data available to customers to influence behavioural change standard roll out approach agreed across the industry development of appropriate tariffs that provide price signals to help reduce demand whilst providing protection to vulnerable customers Innovative tariffs can be developed and used to help incentivise people to be more efficient with the water they use. Tariffs could be based on differing seasonal unit costs (for example charging more for water in the summer when it is scarcer) and volumetric use (such as rising block tariffs, whereby the more water you use the more expensive it becomes). Water companies need to ensure that any tariffs developed include safeguards to protect vulnerable customers. They should also make sure there is effective communication with customers before the tariffs are applied. The implementation of smart metering could allow for more dynamic pricing structures based on near real-time data, driving innovation to enable customers more choice in the tariff they choose. 6.2.3 Water efficiency labelling Smart metering needs to go hand-in-hand with better information to enable informed choices on water use to be made. is expected to come into force in the UK in 2026 (legislation is expected to be laid in 2025). This will cover a wide range of water using products in properties, such as toilets, taps, showers and washing machines. The labelling scheme will encourage consumers to choose products that are more water efficient and help them to reduce their water use, save on energy bills and contribute to the per capita consumption reduction targets. The scheme will be an important component of the suite of demand management actions that need to deliver over 1,000 Ml/d in savings by the 2050s. 6.2.4 Water use in buildings The government has committed to reviewing building regulations and consider minimum standards for water efficiency of products. It is another vital component of the actions needed to achieve demand reductions and could also play a part in simplifying the water use standards that new developments would need to adhere to. We support the progress being made to make new homes more efficient. The government signalled that it would look to review Part G of the building regulations to increase water efficiency requirements for new homes. Enforcement of any new standards will also be key to ensuring their effectiveness and local planning authorities will need to be able to check and enforce any new stricter requirements for new housing development. 6.2.5 Enhanced demand management A much stronger link with local development planning is needed. An enhanced demand management framework that allows further interventions in specific places is needed, alongside a programme of monitoring delivery. This should be considered where either growth is higher than forecast, delivery falls behind schedule, or environmental sensitivities prove to be more acute than previously thought. This could include water credit schemes, retrofitting programmes, prioritised installations, higher water efficiency standards in new buildings. Over the past 12-18 months housing and business growth has been constrained in some areas of the country, because increased abstraction would risk environmental damage, and thereby contravene environmental laws. Growth is important for our economy and a fundamental part of the government's policy priorities. We need to work collaboratively across government, regulators, local planning authorities and water companies to ensure that this can happen without detriment to the environment. A potential way that this could happen is through the implementation of a Water credits system or retrofitting scheme (or both) which would seek to enable near-term growth before longer term supplies are available. Water credits could be created by retrofitting existing buildings to create a pool of water savings. Developers can then use those savings (credits) to offset water needed for new houses and businesses (alongside incorporating water efficiency measures into the new developments). Once the initial retrofitting is installed developers would pay for the credits to fund the system to continue. Water credit or offsetting schemes are being developed in Sussex and Cambridge. They are currently untested. More work and evaluation need to be done before we have evidence that they are a viable solution to enable development in areas where a lack of sustainable water supplies is constraining growth. Effective delivery of the commitments in water resources management plans by water companies would help avoid the need for additional interventions such as water credits or offsetting. On this basis, water credit schemes should only be used in exceptional circumstances to address temporary supply shortfalls while water infrastructure provision is being delivered, enabling growth in the short term. Effective delivery of the commitments in water resources management plans should be prioritised to avoid the need for water credit schemes as far as possible. 6.3 Non-household use from public water supplies Water used by business, the public sector and industry that comes from public water supplies is classed as non-household use. There is a water retailer market that enables non-household customers to choose their retailer, although the incumbent wholesaler water companies physically treat and supply the water. The water industry is not obliged to provide non-domestic supplies, and some water companies are not servicing new requests where they do not have sufficient surplus water available. This is a significant concern for growth. Non-households are a major user of water with around 20% of water put into supply by water companies classed as non-household water use. To enable a thriving economy, we must plan to meet the water needs for new businesses, the expansion of existing businesses and public services that support housing, such as health and social care and education. Demand for water to supply non-household growth is forecast to grow to 158 Ml/d by 2055 under the Do-Nothing scenario compared to 2025.
There is uncertainty around future non-household demand from public water supplies. Emerging technologies associated with achieving carbon net zero and data security and the growth in AI and use of super computers could require additional water beyond what has been planned for in water company WRMPs . New and emerging demands from new industries and technologies will require water which will need to be forecast and planned for. The current non-household demand forecasts in WRMPs are largely based on local authority plans which do not fully reflect the potential additional water needs of existing and new businesses. A lack of clear planning from sectors themselves, coupled with limited consideration of water needs through local authority planning processes is resulting in unplanned water demands in parts of the country. As these sectors are growing and developing, they need to better understand their current and future water use and availability. The better the new emerging industries and businesses can forecast, plan and share this information, the greater chance there is of developing sustainable solutions and new supplies in time to meet both existing and new demands and enabling growth. Planning for non-household use is complex and needs significant improvement which will require cross-departmental government action to strengthen planning processes, and greater flexibility in water resources planning to accommodate growth with adaptation as plans progress. Water should be considered at a sector-wide level. Clear steps need to be established to ensure future needs are understood with confidence and effectively accounted for through water resources planning processes. Understanding the quantity, quality, timing and location of additional water needs from business sectors is crucial. Heavy water-use industries are currently not well prepared and are not prioritising water availability when planning growth and siting new developments. Consideration should be given to whether development of high-water use sectors should be located in less sensitive areas where water is more available and how this could be beneficial to the economy and society in the long run. Reducing the demand for water from non-household sectors will play an important part in reducing demand overall. ( EIP ) sets out a reduction target of 9% from 2019/20 levels by 2038 and a reduction of 15% by 2050. The draft WRMP24s are aiming for 6.1% reduction by 2038 so current plans are falling short of the target. Ofwat's Water Efficiency Lab could potentially be used to fund alternative policy options like voluntary water efficiency labels on buildings (used for hotels in Portugal and USA ). We need NHH customers to use water in a responsible and efficient way. Awareness of water scarcity needs to be increased with non-household water users so that there is a common understanding of the need to reduce water use. This must be achieved whilst keeping the focus on economic growth. We support the Retailer Wholesaler Group ( RWG ) water efficiency sub-group recommendation for the development of a national awareness raising strategy targeting NHH customers and what matters most to them. Making the link between water, energy and reducing costs is key. Regional groups should work with other companies, non-household water retailers and new appointments and variations ( NAVs ) to align the approach to planning water resources, reducing demand, forecasting and monitoring non-household use of mains water. There are key opportunities to reduce demand and the need for water by helping non household sectors become more water efficient. This will include delivering water efficiency audits and advice, the roll out of smart meters. Water companies are planning to increase the smart meter numbers for non-households which will help business to better understand their water use and to encourage them to reduce the amount of water they are using. As with household roll out of meters, the correct infrastructure will need to be in place for this to be effective. We believe that water reduction activity needs to be prioritised in the places which have the greatest water scarcity and environmental pressures. Non-household smart metering programmes should include targeting the highest volumetric users which could have the greatest impact on reducing demand. Some existing tariffs should be reformed, for example, ending the use of decreasing block tariffs (where unit charges reduce as the volume of water consumed increases) which are inappropriate given that they disincentivise efficient use. We expect the sector to transition to tariffs that incentivise the efficient use of water. As with other sectors of use, opportunities should be explored to consider whether there are alternative local resource options available which can provide reliable and secure supplies for processes and uses which do not have drinking water standard requirements. 6.4 Options appraisal framework The Environment Agency has commissioned work to develop an options appraisal framework for water resources planning. The water resource challenges facing England are significant. To address the forecast water supply deficit and achieve secure and sustainable water supplies into the future, regional groups and water companies assess options to both increase water supply and reduce water demand to develop a preferred solution that is appropriate to the area and timescales at which they operate. Depending on how far into the future they need to look, this may need to be an adaptive approach to address uncertainties in the future, such as those associated with climate change and population growth. Typically, long-term investment plans define and schedule the delivery of a combination of schemes over a 2 to 50-year period. The approach used to identify the preferred options to address a supply demand deficit has evolved over time. The least cost planning approach, as set out in the Economics of Balancing Supply and Demand - EBSD (2002) , was used for water resource planning assessments from 2004 through to 2014. This was updated in 2019 when alternative decision-making tools introduced best value approaches to the framework (see the WRMP 2019 reports on the decision making process and risk based planning ). These focused on identifying options that were best value for water company customers and the environment.
The methodologies were further updated to support the WRMP24 submissions, with guidance looking at environment and society in decision making and deriving the best value . These approaches introduced the use of adaptive planning to underpin the decision-making process and reflect the uncertain future. The project will propose a decision-making framework Improved transparency and accountability will lead to genuine comparison of business needs and options at national, regional, water company and catchment levels, and aid regulatory oversight. Improved consistency in the options appraisal process will support water industry planning across water company areas, regions, catchments and nationally. A well-defined framework could result in significant environmental improvement as appraisal would ensure benefits above the prevention of deterioration and minimum legal requirements. 6.5 Enabling and monitoring delivery Effective reporting is required to monitor the successful delivery of options that will secure the water needed to bridge the predicted deficits. This will be important to hold the industry to account for any non-delivery, flag risks to timescales and help address risks. We expect companies to track and monitor the delivery and effectiveness of their demand and supply schemes against their WRMP milestones. Companies should use monitoring plans to consider if, and when, alternative actions or alternative pathways need to be taken. There should be a clear feedback mechanism between results on the ground and the thresholds and triggers in the monitoring plan. Progress on water company action is reported via multiple mechanisms including Environmental Performance Assessment ( EPA ), annual reviews of water resources management plans, RAPID 's gated process and Ofwat performance commitments. We will work across government and regulators to improve the alignment of reporting and to look at additional incentives/penalties to ensure water companies deliver planned commitments. Next: 7. Taking action on water for energy