Research and analysis

Smoothing investment cycles in the water sector

Analysis and recommendations to resolve the longstanding issues of cyclicality in the water sector.

Documents

Smoothing investment cycles in the water sector

Details

The effects of cyclical investment are most acutely felt in the water sector but are also observed in rail, electricity, gas and roads investment. The government is seeking to understand the causes of cyclicality in the delivery of the UK’s infrastructure and to take action to mitigate its impact – reducing cost to the taxpayer and consumers; and promoting growth and sustainability in the supply chain.

In meeting this commitment the government has published its analysis and recommendations to resolve the longstanding issues of cyclicality in the water sector. The report has been produced by Infrastructure UK in collaboration with Ofwat (The Water Services Regulation Authority) and the water industry.

The report sets out a number of recommendations to improve certainty, productivity and value for money; and to reduce the regular round of significant redundancies in the sector. If the recommendations are implemented in full they could reduce the average customer water and sewage bills by 2%, saving £6.50 on average annual bills; saving the water industry £600 million every five years; and prevent up 40,000 job losses over the next five years. Government, the regulators, water companies and the industry will all need to take action and view risks differently if money and jobs are to be saved.

Published 23 July 2012