Water companies manage vital infrastructure that underpins public health, environmental protection and economic prosperity across the UK. Ensuring these assets remain resilient over the long term is critical to maintaining the services we all depend on daily. We’re working closely with the sector to improve our collective understanding of asset health and ensure these essential assets are being sufficiently maintained.
Our roadmap for progress
In our PR24 final determinations, we set out a roadmap to enhance asset health understanding across the water sector. Since January 2025, we’ve been delivering on that plan – engaging with companies, regulators and stakeholders to identify priority assets that should be considered through this workstream.
Our approach involves defining consistent data collection methods for these assets to determine whether there are asset health issues that need addressing ahead of PR29. Where we identify sector-wide issues that cannot be resolved within existing PR24 base expenditure allowances, we will provide additional funding to address these challenges.
Why asset health matters
Asset health forms the cornerstone of operational resilience in the water sector. When assets fail, the consequences can be immediate and severe – disrupting essential services, harming the environment, and eroding public trust. But understanding asset health isn’t just about reacting to failures after they occur; it’s about proactively identifying risks, targeting investment efficiently and ensuring long-term value for customers.
That’s why we’ve launched a dedicated workstream to improve our understanding of asset health in the water sector. This workstream in the short-term 2025-27 period is focused on gathering robust, comparable data on priority assets that meet specific criteria:
- critical asset classes that have a direct impact on performance;
- asset classes with known/indicated challenges relating to current performance;
- asset classes where the visible condition of the asset is one of the indicators of an assets overall health;
- asset classes where there is a sufficient range of assets for this to be significant to the sector;
- asset classes where robust and comparable asset condition and workload data can be collected by May 2026; and
- asset classes that contain long-life assets.
Progress to date
Since launching the workstream, we’ve held four productive workshops with water companies and key stakeholders. These collaborative sessions have enabled us to:
- Develop a shared asset inventory and establish clear prioritisation principles
- Agree a final shortlist of priority assets for 2025-27
- Drafted workload and expenditure definitions to enable consistent reporting
- Begin to develop our condition and asset health data collection approach
- Explore funding mechanisms to provide additional allowances
Our priority assets
Based on extensive sector-wide feedback and alignment with our prioritisation principles, we’re focusing on these priority assets:
- Water network storage (service reservoirs, water towers and contact tanks)
- Civil structures at water treatment works (rapid gravity filters)
- Water boreholes
- Civils at wastewater treatment works (settlement tanks, activated sludge treatment plants and trickling filters)
- Gravity sewers
Looking ahead
Over the coming months, we’ll be working with companies to finalise data definitions, issue data requests, and develop a framework for assessing investment proposals. Our aim is to make our first decision on whether additional allowances are needed by July 2026.
We’re also taking a longer-term view beyond 2027. The valuable insights gained from this workstream will directly inform our approach to PR29 and help shape a longer-term strategy for asset health. This includes applying lessons learned to other asset classes and aligning with wider sector initiatives such as the Asset Management Maturity Assessment and the Operational Resilience Working Group.
Working together for long-term resilience
We’re encouraged by the sector’s engagement so far. We’ll continue to work collaboratively refining our approach, responding to feedback, and ensuring that our regulatory framework supports long-term resilience across the water sector.
For further detail please see our published update paper here.