Policy paper

Water demand Environment Act target delivery plan

Published 1 December 2025

Applies to England

Statutory Environment Act target

• reduce the use of public water supply in England per head of population by 20% by 2038 from a 2019 to 2020 baseline

Interim targets

Public water supply:

• reduce the use of public water supply in England per head of population by 9% by 31 March 2027 and by 14% by 31 March 2032 from a 2019 to 2020 baseline

Leakage:

• reduce leakage by 20% by 31 March 2027 and by 30% by 31 March 2032 from a 2017 to 2018 baseline

Rationale for the interim targets: why and how they will progress delivery of the Environment Act target

Our interim targets are ambitious and will help achieve the long-term target. The targets have been largely adopted by the industry and form a key basis of water companies’ Water Resource Management Plans (WRMPs).

Realisation of the leakage target is dependent on water companies reducing leakage to their committed levels. We are working alongside Ofwat to ensure this is achieved.

Our calculations, conducted in 2022 using WRMP19 forecast data, showed that, if all commitments and proposed policies are implemented as expected, we could overdeliver the long-term target by up to approximately 54%. Having extra policies and delivery interventions in place enables us to maintain our delivery confidence in both the interim and long-term targets. By the end of 2025, we will conduct an updated analysis of our commitments and proposed policies which will take into consideration the latest context and new data. This will provide an up-to-date picture of our target trajectories.

The latest EA summary of Annual Review data shows that water demand has fallen in 2024 to 2025. As of 2024 to 2025, public water supply per person is 5.1% below the 2019 to 2020 baseline. This is where we would expect it to be at this early stage of target delivery, and it will be important that this downward trend is maintained to meet the target. Our interim targets provide us with a strong base to meeting our statutory target and we will continue to work to accelerate progress against this through our activities.

Delivery measures

Government is not responsible for all the levers expected to contribute to the statutory and interim targets, and so we have included additional policy and delivery interventions to provide additional headroom.

Table 1. Summary of leakage reduction measures and supporting evidence under the Water demand delivery plan

Delivery measure	Description	Estimated contribution to the interim targets	Evidence of impact	Responsible	Status
Ofwat regulation	We will work with Ofwat (Water Services Regulation Authority) to hold water companies to account for delivering leakage reduction targets through Ofwat’s rewards and penalties. Water companies have already committed to reducing leakage by 50% by 2050. We will work with Ofwat to ensure they remain on this trajectory which will help drive water demand down.	High	Water UK set out evidence demonstrating the trajectory of leakage reduction to 2050 in their Leakage Roadmap to 2050. With leakage representing approximately 20% of water demand in the system, it is crucial that water companies take action to ensure water supplies remain resilient. For this Price Review period, Ofwat has set water companies a target to reduce leakage by 17% over 2025 to 2030. This will help incentivise companies to accelerate leakage reduction, aiding their own commitments to reducing leakage by 50% from 2017 to 2018 levels by 2050.	Ofwat	In delivery
Smart meter rollout	We will consider policies or standards associated with water usage data to enable water companies to incentivise more water efficient behaviours and reduce leakage, including amplifying benefits of the smart meter rollout.	Medium low	Ofwat commissioned a report from Baringa, a consultancy firm, looking at the lessons learned from smart metering within the energy sector, building a case for the need for smart water metering. Recommendations from the Baringa report are being considered through Ofwat’s new Smart Water Metering Delivery Group, which is attended by regulators, industry and government representatives. A 2024 report by Artesia and Frontier economics further emphasised the increased cost benefit provided by accelerating smart metering through stronger data relay between meters and water companies.	Defra and Ofwat	In delivery
Mandatory water efficiency labelling scheme (MWELS)	We will introduce MWELS on water using products such as showers, washing machines and toilets in 2026. This will allow consumers to be better informed around their water usage. The label will also give customers more information to help them make informed decisions about water efficient products when purchasing.	Medium low	Evidence of the contribution of this policy can be found in our summary of responses and government response to the consultation on the mandatory water efficiency labelling scheme and in Waterwise’s label summary and the Energy Saving Trust’s review.	Defra	In development
Introduce minimum standards	We will consider introducing minimum water efficiency product standards and design guidance to reduce water wastage and remove inefficient or unclear products from the market following the launch of MWEL.	Medium low	This will set a maximum flow rate in place for products, which would help reduce overall water usage by removing inefficient water products off the market, and inspire innovation and competition from manufacturers to make products more water efficient. Evidence on the potential impacts of the Label and standards can be found in the Energy Saving Trust’s review.	Defra	In development
Review water efficiency standards in Building Regulations 2010	We will work with MHCLG (Ministry of Housing, Communities and Local Government) to explore whether the Building Regulations 2010 could be further amended to tighten water efficiency standards and enable consumers to use less water and save on their water and energy bills, as well as to assess where planning policy can enable water efficiency at the point of housing delivery. This could see an amended standard in Part G of the Building Regulations being introduced for new homes in England through fittings from 125 l/p/d (litres per person per day) to 105 l/p/d, and 100 l/p/d where there is a clear local need (i.e., in areas of water stress). We will also review the water recycling and drainage standards in Part H of the Building Regulations 2010, to enable water reuse.	Medium low	Population growth requires new housing developments in England to be developed with increasing levels of water efficiency. Water scarcity is already blocking new development in Cambridge and will become an issue in other parts of the country unless we manage demand alongside developing new water resources. Building new housing to the highest potential of water efficiency leaves room for further housing, business and industrial growth in the future, which could otherwise be blocked due to water scarcity. The less water that is used by housing will also positively impact commercial and industrial development allowing more to go ahead – as water is prioritised for housing and water companies are not obliged to supply water for non-domestic purposes.	Defra, MHCLG, Building Safety Regulator (BSR)	In development
Review planning policy and processes in new household development	We will progress work to consider the role of water companies in large scale development, following the recommendations of the Independent Water Commission for an enhanced role in this process. This will look to solutions such as water reuse options, water efficient retrofits and dual pipe systems.	Low	Since the addition of water efficiency into the Building Regulations, the water housing market has evolved. Water efficiency measures are now commonplace across Local Planning Authorities (LPAs) in England.  As a result of water scarcity some LPAs, in Cambridge and North Sussex, are already building to tighter standards to manage development needs alongside protecting the water environment. Water companies are integral to this process and need to be involved from the outset of a planning application.	Defra, MHCLG	In development
Enable water reuse in new household development	We will review and amend relevant legislation as appropriate to address wasteful product issues with toilets and enable new water efficient technologies.	Low	The use of water reuse systems has a range of benefits such as reduced demand on water infrastructure, reduced carbon emissions and increased flood protection. Customers with water reuse systems may see a reduction in the cost of their water bills, as their use of wholesome water supply is lower.	Defra, MHCLG	In development
Review planning for non-household development	We will review planning policy and processes and investigate water reuse options for new non-household development. Consider voluntary schemes for non-household buildings and work with MHCLG and local authorities to improve knowledge and guidance of water reuse in planning processes.	Low	Water reuse, specifically greywater and rainwater recycling play a key role in ensuring our homes and businesses can be water efficient. Our work to improve knowledge of water reuse, explore the impact of water efficient technologies, and support key partners to deliver water efficient practices could result in more water availability for other infrastructures.	Defra, DWI, MHCLG	In development
Work with partners to reduce non-household usage	We will work closely with the retail Market Operator of England’s non-household Water Market (MOSL), regulators, water companies and retailers to identify options to drive non-household demand down. This includes through MOSL’s Market Performance Framework (MPF) standards, Ofwat’s new non-household performance commitment for water companies to reduce business demand for water (including managing penalties and rewards) and reviewing tariff structures in the non-household market to better understand incentives for water efficiency and demand reduction.	Low	Non-household usage accounts for around 20% of water demand. The top 1% of water users account for 50% of this usage. We recognise that ensuring businesses can adapt to climate change is key to mitigating the risk posed by water scarcity to economic growth.	Defra	In development

It should be noted that, in addition to the estimated contribution ratings provided, we will be conducting further analysis against each of the measures in line with finalised WRMP24 data, which will enable us to determine approximate % contributions against each policy area. This analysis will be conducted by early 2026 and will provide us with greater insight into the projected impact of each measure against the statutory and interim targets.

Key milestones

Our key planned/anticipated milestones to reaching the interim targets are as follows.

Key milestones for 2025 include:

• water companies begin or continue rolling out approximately 10.4 million smart meters (2025 to 2030)
• Ofwat’s Smart Water Metering Delivery Group launched to consider Baringa report recommendations
• consultation on Building Regulations goes out and government response published

Key milestones for 2026 include:

• secondary legislation laid for MWELS
• MWELS and, subject to consultation outcome, amended water efficiency standards in Building Regulations are laid
• anticipated that consultation on Minimum Product Standards will be launched
• review of water reuse regulation and wasteful product issues with toilets (2026 to 2027)
• consultation on water recycling and drainage standards (2026 to 2027)

Key milestones for 2027/28 include:

• anticipated launch of consultation on Minimal Impact Product standards

Monitoring and evaluation summary

Water companies annually report water distribution input (DI) figures (including components of DI and total population) to the EA and Ofwat (through WRMP and water company Annual Performance reports respectively), in line with existing reporting requirements. Annual figures are taken in line with financial years from April to March. This annual data is used by the EA to monitor progress in delivering programmes to manage supply and demand, as well as those aimed at protecting the environment.

This reporting is the source of the baseline 2019 to 2020 figure and will be how the Water demand target is reported. It should be noted that targets relating to leakage will be reported using a 2017 to 2018 baseline, in line with pre-existing industry reporting processes. There are some shared water supply zones on the border with Wales where the population in England are supplied by Welsh Water, however these are not included in the baseline, nor will they be included in annual reporting.

The EA will calculate the metric annually from data provided by water companies in annual reports on their WRMPs. This reporting is statutory, but the content is defined by guidance from the EA.  Reporting for the demand target will include taking data from the reports and aggregating the company-level DI data. The EA will divide the total DI (Megalitres per day) by total population (household and non-household) figures (as supplied by water companies), also provided in these annual reports, to produce a DI/population figure in Megalitres per person per day. The EA technical guidance suggests population is updated by water companies using Office for National Statistics (ONS) data or billing records but can also use WRMP forecast data for that recording year. Additionally, guidance sets out they need to “highlight and explain any changes to the demand forecast, including population and property forecasting. Detail any change to the source data set used for forecasting”.

A percentage reduction will be calculated by:

By using the population figures from the WRMP annual returns, it will ensure they are consistent with those used to set the indicators (e.g. DI and per capita consumption). They will be available at the same time and for the same period as the data on DI. They are more likely to be acceptable to water companies. This will also reflect the population wholly or mainly in England, for which the DI provides public water supply.

We are currently working to review existing data series associated with the target with a view to streamlining methods of reporting. Following this work, we aim to have a clear reporting mechanism by which to monitor and report on our delivery progress against the water demand target. This will also help us see how we are performing against our interim targets.

Policies that support the water demand target will be evaluated. For example, we are currently commissioning a 5 year evaluation plan for MWELS. As part of this we are also commissioning the development of a methodology to measure water usage in the home at a granular level and use this to calculate the water savings from MWELS.