Ofwat set out its financial and operational expectations for Asset Management Period 8 (AMP8) on 19 December 2024. This is the eighth cycle of the regulatory framework set out by the English and Welsh water industry body and will run from April 2025 to 2030.

With more funding than expected and a greater focus on customer bills and needs, utilities businesses will continue to face significant challenges, explains Joe Urbanowicz, Principal Environment Planner, but ones that will ultimately deliver cleaner water and better habitats.

What are Ofwat’s priorities for AMP8?

To accelerate improvements in water quality, supply projects and overflow planning, Ofwat approved £104 billion funding for the AMP8 period. The final determination of the authority’s 2024 Price Review (PR24), it will lead budgets to quadruple over the next five-year period.

The investment will be used to meet the regulatory requirements of bodies including the Environment Agency, Natural Resources Wales and the Drinking Water Inspectorate. Funded projects will also aim to improve future water security and better meet the needs of customers, who are increasingly concerned about clean waterways and the impact of flooding.

The priorities Ofwat has set out for using AMP8 funding include:

• Reducing customer bills by removing costs from company business plans
• Safeguarding customers and ensuring their money is spent responsibly by making water companies accountable to targets across 24 key performance areas
• Delivering growth in the development of reservoirs, infrastructure projects and innovation to secure a sustainable, high quality future water supply

What challenges will this bring for E&P strategy?

This presents a significant challenge for all water companies to deliver their plans at pace. The huge increase in investment levels will lead to a significant growth in works throughout the AMP8 period. This will put pressure on E&P departments and partners to move processes forward quickly, with minimal project disruption or delay.

This arrives in the face of current challenges such as tighter regulatory deadlines and environmental compliance requirements. Plus, there is increased scrutiny over water company operations and spending due to continued public concern and media coverage of pressure groups. All this adds up to huge levels of attention and pressure on utilities businesses to deliver.

How can an environmental consultancy support utilities to deliver AMP8?

To meet the growth demands of AMP8 and deliver E&P projects at pace, we work collaboratively with our clients, design and delivery partners and key stakeholders. Our experience shows that this gives projects the best chance of success from the earliest stage.

AMP8 is going to bring a high volume of instructions, and at Dalcour Maclaren, our teams are set up to hit the ground running. To ensure accuracy at speed, we will:

• Frontload projects during optioneering
• Prioritise identification of key constraints at an earlier stage than usual
• Set out plans to mitigate challenges before work starts

This frontloading means that we can advise on changes to design or methodology, helping to derisk projects and maximise the statutory powers that our clients have.

We know technologies such as AI will help us work faster, and we are finding it also means we must do things differently. We’re already working with clients to innovate and navigate these tools to deliver at scale.

Although we can’t have a direct impact on the other two Ofwat priorities (Impact on Bills and Safeguarding Customers), our teams will deliver a cost-effective service to water companies. By delivering each project in the most efficient way and hitting deadlines, we reduce overheads and support cost savings which can be returned to water customers. After all, we’re their customers too!

For more advice on the challenges of AMP8 for your team, email joe.urbanowicz@dalcourmaclaren.com