To ask the Secretary of State for Environment, Food and Rural Affairs, with reference oral contribution of 23 April 2025 by the Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs, Official Report, columns 1136 and 1165, what proportion of the planned funding for the water system from the private sector had been secured by 23 April 2025.
Answered on
6 May 2025
The price controls set as part of Price Review 2024 came into effect on 1st April 2025. In their Final Determinations, Ofwat set expenditure allowances which fund companies to meet their statutory and regulatory requirements and deliver their performance commitments over the 2025-30 period.
The £104 billion funding package is the highest level of investment in the water sector since privatisation and is set to be the second largest private sector investment programme for this Parliament, which will contribute to the delivery of key elements of the Government’s Plan for Change and Mission Objectives.
The £104 billion expenditure planned over the next 5 years comes from expenditure by the water companies, which are required to maintain, improve and build new infrastructure like pipes and treatment plants. Customers pay for the reasonable costs of these investments through their water bills but over a long period of time, not as the costs arise. As the money to meet these costs is collected over time, water companies need to raise the finance to pay for the investment upfront. This finance comes from investors in the form of debt and equity.