About Consultation
This consultation sets out our proposal to modify companies’ licences to introduce a new asset management competence licence condition, following on from our consultation in June 2025 and our November 2025 conclusions to that consultation.
We are consulting on introducing a new asset management licence condition under sections 12A of the WIA91.
We expect water companies to:
- Understand their assets (condition, criticality and performance)
- Understand the asset related risks to service and the environment
- Develop and deliver mature, well justified business plans to fund maintenance and enhancement of their assets, and
- Deliver the right outcomes from short term serviceability to the long term (including the impact of climate change on assets).
A mature and robust Asset Management Framework supports this by setting out a structured approach for companies to manage their assets and maximise their value.
We consider that advancing asset management within the water sector will promote optimised decision making, driving sustainable performance and outcomes. Ultimately, this will ensure we have greater confidence in companies’ decision making and resultant choices. For companies, this will enable better engineering and cost benefit justification when companies submit business plans, and providing assurance that companies are making choices consistent with the long-term needs of the sector. This is aligned to the principles outlined by the Institute of Asset Management ((IAM), the international professional body for asset management professionals) with the foundations based on the ISO 5500X standards for asset management.
In June 2025 we carried out a consultation setting out our principles for the new licence condition. Respondents were overall supportive that our proposal would meet our objective to uplift the sector’s approach to asset management. We had specific feedback on the proposal to mandate ISO 55001:2024, and based on this feedback have amended to instead require companies to demonstrate the competence of their asset management system in a way that is appropriate and proportionate to their organisational context.
The modifications we are proposing to make are set out in Appendix 1. The modifications’ effects are set out in section 3.1. The reasons why we are proposing to make the modifications are set out across this notice, including in section 3.1.
Additional licence modification – deletion of Condition L
In addition to our proposal in relation to the new licence condition, we are also proposing to remove Condition L: Underground Asset Management Plans. Respondents were supportive of this proposal in our 2025 consultation. Further detail is provided on this in Section 3.2.
As set out in Appendix 1, we are also proposing to insert into Condition A new definitions as a consequence of the introduce of the new asset management competence licence condition.
Responding to this consultation
We would welcome any comments on this document. Please email them to [email protected] or post them to:
Asset Management Maturity licence condition response
Ofwat
Centre City Tower
7 Hill Street
Birmingham B5 4UA
The closing date for this consultation is 5pm on 17 July 2026. If you wish to discuss any aspect of this consultation, please contact the Engineering and Asset Management team by email at [email protected]
We intend to publish responses to this consultation on our website at www.ofwat.gov.uk. Subject to the following, by providing a response to this notice you are deemed to consent to its publication.