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Ofwat, the water industry regulator for England and Wales, has unveiled plans to offer up to £40 million in funding for "highly collaborative projects" to tackle some of the sector's biggest challenges. These include reducing emissions, cutting leaks, curbing pollution, and enhancing customer service.
In its fifth Water Breakthrough Challenge, Ofwat will provide grants to water companies that team up with innovative partners from outside the sector—such as charities, academic institutions, businesses, and civil society organizations. The goal is to foster groundbreaking solutions that can drive the industry forward through new technologies, business models, or operational practices.
To qualify and address critical industry challenges, projects must be led by a water company in England or Wales. These include adapting to climate change, protecting natural ecosystems, improving long-term resilience, and finding new approaches to delivering essential services.
Two funding streams are available. The "Catalyst" stream offers grants between £150,000 and £2 million, with a submission deadline of January 6, 2025. The "Transform" stream, for larger projects, will provide between £2 million and £10 million in funding. The first stage of entries closed on September 30. Successful applicants will proceed to the second stage in November, with winners announced in May 2025.
"From sewage sludge to leaks, smart water neighbourhoods to supporting vulnerable customers, these partnership-delivered projects are helping to solve the big challenges we face," said Dr Jo Jolly, Ofwat's director of environment and innovation. "Collaboration is at the core of the innovation fund – among water companies and with organisations outside of our sector. They foster new thinking and new approaches to problems and result in solutions that may otherwise not have come about.
"In this fifth Water Breakthrough Challenge, we're awarding up to £40m to highly collaborative projects that will make even greater progress in solving our sector's challenges and create a positive legacy for customers and our environment."
Since 2020, Ofwat's Innovation Fund has distributed over £150 million across 93 projects, all aimed at driving innovation in the water sector to meet the changing demands of customers, society, and the environment.
Among the past winners are notable projects like Pipebots, a collaboration between Sheffield University, Synthotech, and three water companies, which deploys small robots to detect faults inside pipes. Another standout is the Catchment Systems Thinking Cooperative (CaSTCo) project, involving a dozen water and sewage companies, The Rivers Trust, the Zoological Society of London, charities, and universities, focused on improving water management across entire catchment areas.
"Investment from the water industry is absolutely integral to forging a healthier future for our rivers, and Ofwat's Innovation Fund is particularly valuable in encouraging companies to work on creative, groundbreaking solutions to water challenges," said Emma Brisdion from The Rivers Trust. "The Ofwat-funded CaSTCo project - which is building the first national framework for citizen science and catchment monitoring standards - helped The Rivers Trust to kickstart Big River Watch alongside a Foundation for Water Research legacy fund.
"Big River Watch is our entry-level citizen science survey that anyone can join via our free app," added Brisdion. "It is a really important tool to support CaSTCo in introducing new and diverse audiences to river science."
The announcement follows new government legislation introduced last week, granting Ofwat and the Environment Agency expanded powers to penalize water companies. The Water (Special Measures) Bill includes provisions to ban executive bonuses and impose stricter penalties, including potential jail time for executives who violate the law.
The Bill also aims to enhance transparency, requiring independent monitoring of every sewage outlet and mandating that water companies publish real-time data on all emergency overflows.
These developments occur amid rising tensions between Ofwat and the leading water companies. Recently, water firms warned that Ofwat's draft decision to slash £17 billion from the sector's proposed £105 billion investment plans could endanger critical initiatives. According to Water UK, the regulator's proposal would cut £1.3 billion from the industry's nutrient reduction program, reduce storm overflow spending by £2.1 billion, and cut net-zero investment by 66% over the next pricing period.
Despite these cuts, Ofwat's plan would increase household water bills by just £19 per year over the next five years, according to the industry body.
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