Ofwat has launched consultations on its draft decisions to allow solutions for two Strategic Resource Options in the RAPID programme to continue to receive development funding to proceed to Gate 4.

The assessment process is being overseen by RAPID, with input from partner regulators Ofwat, the Environment Agency and the Drinking Water Inspectorate.

The overall classification of the submissions for the Grand Union Canal Strategic Reservoir Option (GUCSRO) is satisfactory and the overall classification of the submissions for the Minworth Strategic Resource Option (MRSO) is good.

The consultation period for the solution owners and other interested parties to make representations on the draft decisions is 6pm on 17 October 2025 – Ofwat’s current aim is to publish the final decisions for both solutions at 10am on 10 December 2025.

Owners of the Grand Union Canal Strategic Resource Option 1 solution Affinity Water and Severn Trent, working with the Canal & River Trust, and owners of the Minworth Strategic Resource Option 1 solution Severn Trent and Affinity Water submitted their respective gate three reports to Ofwat on 30 May 2025 for assessment.

Grand Union Canal Strategic Resource Option is dependent on Minworth Strategic Resource Option

The GUCSRO will transfer up to 115 megalitres per day (Ml/d) of additional water in order to provide a deployable output benefit of 100 Ml/d. The transfer may also be used to support neighbouring companies, such as Thames Water and Cambridge Water.

The option is dependent on water from the Minworth Strategic Resource Option, which includes an advanced water treatment plant in Birmingham (Minworth) and a new pipeline into the Coventry Canal at Atherstone.

Ofwat’s draft decision will allow the solution owners to continue to develop the solution up to a Conditional Review Point (CRP) of 11 December 2025 after which partner regulators will make a final recommendation on progression beyond the CRP to Ofwat.

Ofwat has material concerns around the maturity of the solution and its programme. governance, costs and risk coverage. There is also uncertainty around the solution’s costs, due in part to the lack of a preferred site for the treatment works and the absence of fully costed environmental and water quality mitigations.

The solution owners are required to arrange and hold a minimum of two meetings with RAPID, Ofwat, the Environment Agency and the Drinking Water Inspectorate to provide and present evidence of reaching a complete preferred solution option The first meeting should be before 3 October 2025 and the second meeting should be before 7 November 2025.

Funding is allowed for the solution to continue and progress up to the CRP - funding for progression of the solution to gate four will depend on the CRP outcome. The additional allowances for completing gate four between 1 April 2025 to 31 March 2030 were determined as part of the Price Review 2024 process. Ofwat has determined that all expenditure of £8.5 million is efficient and appropriate, and has allowed it in full.

The Minworth Strategic Resource Option will take surplus treated water from Severn Trent's Minworth Wastewater Recycling Centre and further treat it at a new Advanced Water Treatment Plant. Instead of being discharged into the River Tame, the water will be transferred to the GUCSRO, using a new pipeline and the Canal & River Trust’s existing infrastructure. From there, it will be moved to the Affinity Water supply area to help meet water shortages, with the option to supply Thames Water in the future if required.

Ofwat has decided that the Minworth solution should be funded to progress up to a conditional review point of 11 December 2025 after which the partner regulators will make a final recommendation on progression beyond the CRP To Ofwat.

Due to the integration with the Grand Union Canal option, on which Ofwat has concerns, the MSRO is likewise subject to the same Conditional Review Point of 11 December.

In the 2019 Price Review, Ofwat determined an expenditure allowance of up to £3.6 million for Minworth to cover gate four activities up until 31 March 2025.

However, the option did not reach gate four within the PR19 period and the gate four allowances were therefore reassessed as part of the Price Review 2024 final determinations when Ofwat allowed up to £8.09 million to complete gate four in the period 1 April 2025 to 31 March 2030, subject to the outcome of the CRP.

Despite this, Ofwat has not applied any delivery incentive penalties - Ofwat’s assessment of the efficient costs as spent on gate three activities results in an allowance for the solution of £7.6 million (of £7.6 million claimed) which includes underspend from gate two. The regulator has determined that all expenditure of £7.6m is efficient and appropriate and allowed it in full.

Following the Conditional Review Point of 11 December, Ofwat will confirm suitable timing for gate four.

Click here to download the Grand Union Canal Strategic Reservoir Option draft decision document

Click here to download the Minworth Strategic Resource Option draft decision document