PN 11/20: Ofwat drives forward plans on its innovation fund and competitions


Following Ofwat’s consultation between May-June 2020, Ofwat has unveiled details of how it will design and implement its innovation fund using two types of annual competition.

In its strategy, ‘Time to Act, Together’, Ofwat said the water and wastewater sector faces many challenges, such as climate change and population growth, that put the services we all rely on at risk. Ofwat’s price review framework promotes innovation by setting water companies stretching outcomes and allowing them the flexibility to adopt innovative means of delivering, and it is encouraged to see some companies demonstrate real ambition in this space.

But there remain significant untapped opportunities for the industry to work together, with the supply chain and those in other sectors to trial and adopt new practices and technology to transform performance.

To help do that, Ofwat has finalised the details of its innovation competition aimed at uncovering new affordable solutions to long term challenges. Ofwat has made up to £200m of funding available which will be accessed through a series of annual competitions during 2020-25.

The competitions complement Ofwat’s wider approach to innovation and the water sector’s own draft ‘UK 2050 Water innovation strategy’, which identified key themes focussed on providing benefits to customers and the environment.

After seeking feedback from a wide range of stakeholders, Ofwat confirms the following conclusions on how the fund and competition will work.

  • The fund can be accessed directly by water and wastewater companies and new entrants. Other parties can access the funding indirectly through collaborative bids.
  • There will be two strands of the competition – the innovation in water challenge and the main competition.
  • The innovation in water challenge will be a Dragons Den-style competition for smaller projects, which will particularly interest supply chain businesses who might not always get the opportunity to pitch to big businesses.
  • The main competition will be for larger, strategic projects involving cross-water company collaboration, as well as with other stakeholders in the water sector and beyond.
  • Ofwat expects the innovation in water challenge to open in January 2021 and the main competition in April 2021.

Ofwat is now identifying an innovation fund partner through a tender process to help it run the competitions and will be releasing further details in the autumn. Ofwat will continue to work with the sector through the autumn as it finalises the application and assessment process.

John Russell, Senior Director at Ofwat said:

“The introduction of innovation funding and an innovation competition will act as a catalyst for change, encouraging new ideas and approaches to help address current challenges.

By emphasising the need for stronger collaboration and partnership across the sector and beyond, we believe innovation funding and the innovation competition will help accelerate change. I look forward to appointing an innovation fund partner to help us with the design, implementation and ongoing monitoring and administration of the innovation competition and make a real difference for customers and the environment for years to come.”


Notes to editors:

  1. Innovation funding and competition: decision on design and implementation
  2. Innovation funding and competition: Further consultation on design and implementation
  3. Time to Act, Together
  4. UK 2050 Water innovation strategy draft