Water UK, the water sector’s trade body, is warning Ofwat over the risk of potential mass appeals by the water companies to the Competition and Markets Authority in 2025 unless significant changes are made to the 2024 Price Review process.

Southern Water’s finances are coming under pressure, according to a report by the Financial Times this morning.

A coalition of nature groups has released an analysis of water company AMP8 business plans for the next five years showing that the water industry will spend just 2% of its total budget - 5% of the enhancement budget ( £2 billion) – on natural solutions.

Wessex Water is warning that Ofwat’s Draft Determination (DD) on its AMP8 Business Plan puts its ability to retain and attract investment at risk.

Retail water market operator MOSL is warning that funding and Price Control Deliverables (PCDs) for smart metering set out in Ofwat’s draft determinations create a significant risk that companies will not be able to deliver demand reductions during PR24 to stay on track for Defra’s 9% reduction target by 2038.

Anglian Water’s Regulation Director, Darren Rice, outlines the changes Ofwat needs to make to ensure the water company’s Final Determination is investable and deliverable, following discussions with the regulator on Anglian’s proposed business plan for 2025-2030, saying: "As it stands the allowed return proposed in the Draft Determination will not enable us or the wider sector to attract the necessary debt and equity capital to fund AMP8 investment programmes."

Water UK is warning that unless Ofwat changes its approach, equity investors will not provide all the capital the sector needs at AMP8, especially when more attractive investment opportunities are available elsewhere.

Moody's Investors Service is warning that Ofwat’s Draft Determinations for the water companies in England and Wales  AMP8 Business Plans increases the risk that sector returns may not be enough to attract the equity funding the companies need to support increasing investment.

Fitch Ratings is warning that some UK water companies will “find it challenging” to maintain their existing credit ratings for AMP8 - and those who fall to do so will be subject to a regulatory cash-lock up.

More than 600 people attended a virtual public meeting staged by Ofwat yesterday to get the views of customers and stakeholders on the draft decisions on business plans of all water companies in England for 2025 to 2030.