Water Efficiency Lab

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Water Efficiency Fund

The Water Efficiency Fund (WEF) is a £100 million initiative by Ofwat aimed at stimulating a transformative, sustained, and measurable reduction in water demand across England and Wales by using a range of water efficiency approaches. It aims to foster collaboration and innovation on water efficiency at a scale never seen before.

The WEF has two streams:

  • The Water Efficiency Campaign (WEC) will promote behaviour change that encourages people and businesses to use less water
  • The Water Efficiency Lab (WEL) will fund the development of new technologies and processes for water efficiency

Click on the links below to find out more.

Latest news

  • We’ll be announcing the winners of the first £5million round of the WEL (‘WEL1) – on 23 June 2026. WEL1 focused on the challenge of providing water customers with actionable insights which help them understand and reduce their water use
  • We have confirmed our second competition (‘WEL2’) will open on 3 August 2026. WEL2 will focus on reducing customer-side leakage. Find out more at https://waterinnovation.challenges.org/water-efficiency-lab/
  • Other work on the WEF is ongoing, as we are finalising the approach to contracting the delivery body for the campaign and setting up advisory panels. We will continue to engage with stakeholders on this process.

Water Efficiency Campaign (WEC)

Water is precious. To protect it, we all need to use less. The Water Efficiency Campaign (WEC) is a bold, national movement to reset the way we think about water.

In England and Wales, demand for water is rising rapidly, and we are heading towards a significant supply gap. By 2055, England alone is predicted to need an additional five billion litres of water per day. We want to create a future where saving water is not an occasional act, but a natural part of everyday life.

This campaign, funded by water companies, aims to reshape the public’s relationship with water and embed water-saving behaviours into daily routines. Through compelling storytelling, practical tools, and accessible guidance, the campaign will foster a positive, year-round culture of water efficiency.

The campaign is a collaborative project involving all water companies in England and Wales, alongside DEFRA, the Environment Agency, the Welsh Government, Natural Resources Wales, consumer groups representing both households and businesses, and Ofwat.

23red, part of Capgemini, was appointed in January 2026 to deliver the WEC following a robust and competitive procurement process. To support delivery, 23red has formed the WEC Collective—a purpose-built partnership of organisations with complementary expertise, working in collaboration with key stakeholders.

We are on track to launch the Water Efficiency Campaign (WEC) in May 2026.

Water Efficiency Lab

The WEL is an innovation competition, awarding £25m over 5 years.

Each year, innovators are asked to develop solutions around a specific theme and up to £5m is awarded between winners.

It is available to any UK innovators, with projects across both households and businesses.

WEL 1 launched on 25 November 2025 – and closed on 10 March 2026. WEL 1’s theme is Actionable Insights – using data to inform customers and change behaviours.We’ll be announcing the winners of the first £5million round of the WEL (‘WEL1) – on 23 June 2026.

We have confirmed our second competition (‘WEL2’) will open on 3 August 2026. WEL2 will focus on reducing customer-side leakage.

Find out more at https://waterinnovation.challenges.org/water-efficiency-lab/

About the Ofwat Water Efficiency Fund

The £100 million WEF is designed to stimulate a transformative, sustained, and measurable reduction in water demand across England and Wales by using a range of water efficiency approaches. It aims to foster collaboration and innovation on water efficiency at a scale never seen before.

Our ambition is to promote efficient water usage, gather greater understanding, and remove barriers to help water companies to deliver on their responsibilities.

The fund will work alongside Ofwat’s Innovation Fund, which has already awarded funding to projects focused on water efficiency.

This includes a project that seeks to incentivise reduced water usage through a points and rewards-based system, which was granted £1.8 million as part of Breakthrough Challenge 4 and is currently being developed.

We intend for the fund to benefit customers in England in Wales, so it will be paid for by bill payers. It will cost £100 million, which is around 62 pence per year for each household on average.

Why the Water Efficiency Fund is needed

Water companies in England and Wales currently supply around 14 billion litres of water per day for public water use.  

As part of the National Framework for Water Resources, the Environment Agency has predicted that we will need an additional 5 billion litres of water per day to sustain the current demand in England, which is around 35% of the current water supply. This is enough to fill 2,000 Olympic swimming pools. 

In Wales, there are similar concerns, with water scarcity predicted to become more prevalent across the country by 2050, according to the Welsh Government. 

The extra water is needed to: 

  • Reduce unsustainable abstraction, so that sensitive habitats are protected 
  • Increase resilience to drought to reduce the likelihood of interruptions to supply 
  • Supply a growing population 
  • Adapt to changing water availability driven by the impacts of climate change 

Securing long-term supplies will require additional water supply from new infrastructure projects, reducing losses through leakage, and reduced demand – which the WEF is working to address. 

Water companies are already looking to deliver water efficiency initiatives.

This includes: 

  • A widespread shift to help customers reduce their water use by improving the information available to them on how much they use  
  • Installing water efficient fittings and appliances, such as efficient showerheads that provide the same experience but use less water 
  • Communicating with customers on the importance of using water wisely and exploring alternative tariff structures to put incentives in place to reduce usage. 

As part of the 2024 price review, water companies were funded to deliver programmes that will secure additional water supplies, including through 30 new major projects and Strategic Resource Options (SROs). See more detail in our final determinations.  

But even with these programmes, the associated investment, and supporting policies, we think the sector is at risk of falling short of its long-term goals for water efficiency.  

We think a different approach is urgently needed, and a central fund has the potential to kickstart additional collaborative and innovative work necessary to meet our long-term needs. 

Developing the Ofwat Water Efficiency Fund

On 13 February 2025 we published our final decision document, outlining our approach for the Water Efficiency Fund (WEF).

This document explains how the WEF will be set up, including that it will be split into two streams;

  • The Water Efficiency Campaign (WEC) will promote behaviour change that encourages people and businesses to use less water
  • The Water Efficiency Lab (WEL) will fund the development of new technologies and processes for water efficiency. We will be open for applications in 2025.

The WEF is a £100 million fund to stimulate a significant reduction in public water supply demand in England and Wales through effective, large-scale, innovative and insightful projects.

We ran two consultations in July 2023 and May 2024 to gather stakeholder input into how the WEF should be structured and run. In response to the second consultation:

  • Over 80% supported dividing the fund into two streams that included a large behavioural change campaign and a separate competitive process for water efficiency projects.
  • 63% of respondents supported our proposed division of funds between the Water Efficiency Campaign (WEC) and Water Efficiency Lab (WEL), while 25% partially supported and 12% did not support the approach. We recognised the variety of responses given the uncertain nature of outputs and have adjusted our approach to flexibly allocate funding throughout the 2025-30 period based on ongoing work and findings.
  • More than 85% of respondents supported the integration of the administration of the WEL with the Innovation Fund.
  • More than 85% of respondents supported the use of a gated mechanism to provide oversight of the WEC.

For more detail on the consultations, look at ‘Scoping the Water Efficiency Fund: High level consultation‘ and ‘Scoping the Water Efficiency Fund: Second Consultation’.

Since then, we have developed our approach to the Water Efficiency Fund further, as outlined in our final decision document.

This document builds on the feedback from the two consultations and sets out our approach to the WEF.

Key features of the WEF include:

  • Maintaining a flexible approach to implementing the Water Efficiency Fund, allowing for adjustments based on effectiveness and evidence gathered.
  • Starting the Water Efficiency Campaign small, focusing initially on planning and evidence gathering before scaling up over time.
  • Using the campaign to raise awareness of water use and seek opportunities to enable behaviour change.
  • Making use of the Water Efficiency Lab to support projects that improve water efficiency beyond current plans, with tiers for funding projects of different sizes.
  • Annual competitions, as part of the WEL, alongside Ofwat’s Innovation Fund to unluck progress on water efficient technology, processes and approaches.

Water Efficiency Fund key documents