- Second Water Efficiency Lab (WEL 2) will incentivise and reward innovative solutions that reduce leaks in homes and businesses to cut water waste and save money.
- Between 1 and 1.5 billion litres of water is lost to leaks in our homes and businesses every day – costing bill payers up to £1.6 billion a year.
- England faces a 5 billion litre a day shortfall for public water supplies by 2055 – and a further 1 billion litre a day deficit for the wider economy.
- Wales faces a significant water management challenge due to the impacts of climate change, with an increase in demand projected to grow sharply by 2055 if action isn’t taken.
The second Water Efficiency Lab (WEL2) will award up to £5 million to innovators who develop tools and solutions that can help to identify and cut the 1 to 1.5 billion litres of water lost to leaks in homes and businesses every day.
It is estimated that between 1 to 1.5 billion litres a day[1] is lost to leaks in our homes and workplaces – equating to up to 547 billion litres a year and costing customers and businesses between £1-1.6 billion.[2] This can include leaks from water pipes or fittings, including internal plumbing and external supply pipes within property boundaries.
In addition to the direct cost to customers, “escape of water” claims from businesses and households cost UK insurers £1.25 billion in 2024, with almost three quarters of that sum coming from household leaks.[3]
Finding and fixing customer-side leaks is essential to achieving better water resilience, securing water supplies for everyone, and preventing the environmental damage if water is over abstracted from aquifers or rivers. By proactively identifying and fixing leaks, customers can reduce their water bills and minimise the risk of costly property damage and unexpected repair bills.
Through the Water Efficiency Lab, Ofwat will award £5 million to the most promising solutions that help to prevent, predict, pinpoint and/or fix customer-side leaks in homes and businesses – with up to £1.5 million available to each winner:
- PREVENT: Prevent leaks through better materials, accessible fixtures, or retrofit of durable components
- PREDICT: Use data or models to predict where and when a leak is likely to occur before failure happens
- PINPOINT: Identify the exact location of a suspected or confirmed leak – such as ‘second floor bathroom toilet’ rather than ‘somewhere in this property’
- FIX: Enable low-intervention, low-disruption or low-cost repairs, or simplify the repair journey from detection to completion
Emma Hardy, Minister of State for Defra said:
“This summer’s drought is a stark reminder of the pressure on water supplies, with parts of the country seeing some of the driest conditions in decades and water companies introducing restrictions to protect supplies for millions of customers.
“Every day, up to 1.5 billion litres of water is lost to leaks in homes and businesses which is water we simply cannot afford to waste. That is why this government is backing British innovation through the Water Efficiency Lab, to help people find and fix leaks quickly and affordably.”
Paul Hickey, Managing Director of RAPID, Ofwat said:
“Warmer, drier summers and wetter winters are putting pressure on our water supply, and climate change will only accelerate this trend. This means in many areas we are using water faster than nature can replace it. As things stand, there will not be enough water to meet demand if it remains at current levels, but with the data and technology to use water more wisely, we can protect the environment and reduce usage all at once.
“A quarter of all the water lost to leaks happens in our homes and businesses, but cutting them will save water, energy and customer money. However, water users cannot be expected to reduce their water consumption on their own – that’s why they need new tools, technologies and insights funded by the Water Efficiency Lab to reduce their water consumption in a way that supports, or actually improves, quality of life or business operations.”
Dr Dan Simmons, Managing Director, Quensus Intelligent Water Management & Leak Detection, which is leading the Water Efficiency Lab 1 winning project, The WIN Initiative said:
“UK commercial properties lose up to 30% of their water to hidden customer-side leaks like faulty toilet valves. Data alone doesn’t stop this. Through The WIN Initiative, we combine live water sensor data with a building’s occupancy and energy use to separate real problems from normal variations in water use. Round one funding has already helped us clear a significant hurdle: getting tenants, landlords, facilities managers, water retailers, and insurers to agree to the installation and data-sharing. Scaled nationally, this technology could save up to 35 million cubic metres of water a year.”
The Environment Act has set an ambitious target to reduce the use of public water supply per person by 20% to 122 litres a day by the end of March 2038 (ultimately aiming for 110 litres a day by 2050) to protect the environment and secure drinking supplies. On average, we currently each use 144 litres of water a day, totalling 8.8 billion litres.
Leaks in homes and businesses account for around a quarter of water lost to leaks in England and Wales, with three-quarters (almost 3 billion litres a day) occurring in the mains network.[4] Water companies have record levels of funding to make the biggest upgrade ever seen to water infrastructure, improving water supply and resilience. This includes a targeted 17% reduction in leakage by 2030, on top of the 43% reduction achieved in the last 35 years. Where companies fail to deliver, Ofwat will hold them to account including returning money to customers.
Supporting consumers to identify and cut leaks in homes and businesses helps to tackle leakage outside of water company control. And small changes from everyone at home and at work will make a big difference. The Water Efficiency Lab is fostering innovation to empower people and businesses to reduce their water usage and support the water sector to build a more sustainable, resilient and efficient water system.
Just one leaky toilet can lose as much as 250L per day – and cost customers around £20 a month. With the right tools and technologies to stop leaks on their premises, the Water Efficiency Lab aims to save customers money while driving down leaks.
In June 2026, Ofwat announced the winners of WEL1, which is funding innovations that provide water users with data-led insights to help them make water efficient choices. The winners include a programme from the Royal Horticultural Society (RHS) to help homeowners make water efficient choices in their garden, a pilot fitting homes with water efficient household appliances to reduce their water use to just 50L per day, and a partnership with supermarkets, pubs and retailers to understand how to use water smartly across their premises.
A further WEL winner, the WIN Initiative, led by Quensus, has been awarded £495,000 to install more than 1,000 sensors across 30 commercial buildings to tackle the 10 to 30 per cent of water lost in commercial settings to leaks and continuous flow. The project will also test whether linking water efficiency to insurance premiums could turn water saving from a voluntary commitment into a financially motivated one, with insurer Aviva exploring how a new Water Management Plan standard might unlock benefits for building owners.
The Water Efficiency Lab is delivered by innovation prize experts Challenge Works (part of Nesta), in partnership with Arup and Isle, and funded by Ofwat’s Water Efficiency Fund.
Applications open at 1pm on 3 August 2026 and close on 20 October 2026. For full details and to apply, visit waterinnovation.challenges.org
-ENDS-
Notes to Editors
[1] Around 750-800 million litres a day for customer supply pipe leakage (the pipe under your driveway/between your meter and your home). In addition to that, 300-700 million litres a day for plumbing losses which are very hard to evaluate, especially since they drop significantly as soon as you have a smart meter, so we can’t measure them without affecting them. SOURCE: Customer Supply Pipe Leakage and Plumbing losses reporting definitions, Artesia and HR Wallingford, April 2026 (for Ofwat)
[2] The typical cost of a litre of tap water is 0.3p/litre (or £0.003/litre), equating to between £3,000,000 and £4,500,000 a day for 1-1.5 billion litres of water lost to customer side leakage, or £1,095,000,000 to £1,642,500,000 a year.
[3] Estimates from the Association of British Insurers
[4] Approximately 3 billion litres of water is lost to leaks in the mains network every day in England and Wales. Water companies have targets to reduce network leakage by 17% by 2030. SOURCE: Ofwat: Leakage.
For all media enquiries about the Water Efficiency Lab or the Water Innovation Fund, please contact [email protected] or call +44 (0)20 7754 3610
For all media enquiries about Let’s Save Water, the water efficiency campaign, please contact the Ofwat press office on [email protected] or call 0121 644 7700
About the Water Efficiency Lab
The Water Efficiency Lab (WEL) is an annual, challenge-led competition to unlock and scale innovations that reduce water use by households and businesses across England and Wales. The first £5million round of the WEL focused on the challenge of providing water customers with actionable insights which help them understand and reduce their water use. The WEL is being delivered by challenge prize experts Challenge Works alongside Arup and Isle Utilities.
The WEL is part of Ofwat’s £100 million Water Efficiency Fund (WEF) designed to stimulate a transformative, sustained, and measurable reduction in water demand across England and Wales by using a range of water efficiency approaches, including awareness raising and behaviour change. It aims to foster collaboration and innovation on water efficiency at a scale never seen before. The WEF also includes a Water Efficiency Campaign (WEC), ‘Let’s Save Water’ which is promoting behaviour change that encourages people and businesses to use less water. More information on the campaign is available at letssavewater.com.
About Challenge Works
Challenge Works designs and runs challenge prizes to spark innovation in science, technology and society. It is part of Nesta, the research and innovation foundation. Its challenge prizes offer a series of incentives in return for solving a defined challenge, creating breakthrough innovations, helping innovators thrive, and unlocking systemic change. We have run over 100 challenge prizes awarding over £310m on behalf of public, private and philanthropic funders around the world.
About Arup
Dedicated to sustainable development, Arup is a collective of designers, consultants and experts working globally. Founded to be humane and excellent, we collaborate with our clients and partners using imagination, technology, and rigour to shape a better world. Together we help our clients solve their most complex challenges – turning exciting ideas into tangible reality as we strive to find a better way and shape a better world. With a community of over 1800 water professionals, Arup is leading global thinking across key areas like innovation, resilience, net zero carbon and sustainable water management. Find out more: www.arup.com
About Isle Utilities
Isle is a global consultancy, partnering across the water system to accelerate the water environmental transition. Our services and platforms help de-risk the development, commercialization, and adoption of technologies, creating value and accelerating innovative solutions. Find out more: www.isleutilities.com