United Utilities to benefit from accelerated schemes worth £2.2bn

The cost of delivery for a raft of utilities infrastructure has been revised up following a public consultation. 

The Water Services Regulation Authority, or Ofwat, has announced 33 infrastructure schemes totalling £2.2 billion, increased from the previous cost of £1.6 billion. 

The new sum is in part due to an accelerated timeline of delivery, but primarily because of a revised proposal on two storm overflow projects under water supply company United Utilities (UU). 

“The total potential costs of the accelerated project have increased from £1.6 billion to £2.2 billion,” said Ofwat. “The increase is mainly driven by two United Utilities schemes to accelerate storm overflow improvements; Ofwat has updated the total costs following additional information from United Utilities.” 

Full scope 

The permitted 33 infrastructure projects are scheduled to begin during the next two financial years, from 2023-24, and will run up to 2030. 

They include 10 schemes worth nearly £1.7 billion to tackle storm overflows, like UU.  

The plan is to reduce overflow spills by around 10,000 per year. This includes work to improve water quality at the bathing water site at Ilkley on the River Wharfe and spills into Lake Windermere. 

Other schemes include installation of 462,000 smart meters, six water supply projects to provide an extra 75Ml/d of water and to protect 31Ml/d of peak output, and three nutrient neutrality schemes worth potentially £160 million. 

The water sector is facing arid summers and more frequent and intense rainfall during other seasons. There is also a need to significantly improve river and bathing water quality across the UK.  

Therefore, Ofwat agreed with Defra companies to make an early start on schemes included in existing plans, where they could demonstrate clear need and benefits to customers and the environment. 

“All the schemes which were set out in our draft decisions for consultation have been approved,” said Ofwat. 

Altered schemes 

As well as UU, other changes include: 

• Accelerated design of North Suffolk Winter Storage and Lowestoft reuse schemes given links to Suffolk Strategic Network and Storage. 
• Portsmouth Water’s accelerated smart metering programme has been reduced from £120 million to £64 million. 
• Southern Water’s storm overflow scheme to remove at least 420 spills per year (down from 600). 
• Technical amendments to price control deliverables to improve the customer protections in relation to delivery. 

“The water sector needs to act now to secure future needs of customers and the environment,” said Chris Walters, senior director, Price Review at Ofwat. “The schemes we are confirming today will help tackle storm overflows, install more smart meters, provide additional water supply and improve river water quality. In each case the company has demonstrated a clear need and benefits to customers and the environment.” 

United Utilities was approached for comment. 

To read Ofwat’s final decision documents in full, click here.  

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