Ofwat has launched a consultation on a proposal to allow four water companies to seek further funding during the AMP8 investment programme.
The consultation under section 12A of the Water Industry Act 1991 on proposed modifications to Condition B of the licences of Anglian Water,Northumbrian Water,Southern Water and South East Water follows the Competition and Markets Authority (CMA) redeterminations on their 2024 price review (PR24) appeals.
The proposed modifications will give effect to the CMA’s decisions in relation to certain large schemes in the large schemes gated process established by Ofwat as part of PR24.
The process covers certain high-value enhancement schemes where Ofwat had concerns around scope, cost, deliverability and complexity, or where schemes involved novel elements or complex technologies.
Because of the uncertainties, the price controls Ofwat set at PR24 for the 2025-2030 period did not include full costs for schemes included in the large schemes gated process. The cost change process will, if necessary, allow companies to access additional revenue during the current PR24 period for critical cost areas.
As part of the 2024 price review (PR24), Ofwat established a large schemes gated process to provide additional regulatory oversight and assurance for certain high-value enhancement schemes where we had concerns around scope, cost, deliverability, complexity, or if schemes involve novel elements or complex technologies.
The CMA’s final determinations report submitted to Ofwat in March 2026. included five schemes tobe added into the large schemes gated process. Anglian Water, Southern Water and South East Water each have one scheme and Northumbrian Water has two schemes.
Ofwat is proposing the licence modifications to give effect to the CMA's decisions and enable Anglian Water, Northumbrian Water, Southern Water and South East Water to access additional revenue in-period, if necessary, for the schemes that the CMA has added into the large schemes gated process.
The effect of the modifications is that Ofwat will be able to initiate an interim determination in 2026, 2027 or 2028 - interim determinations can change the level of price controls between price reviews.
Following the consultation period, Ofwat expects to publish its decision on the proposed licence modifications in June 2026. If the regulator decides to make the modifications, Ofwat expects them to come into effect on 15 July 2026 in time for it to decide whether price controls for 2027-28 and subsequent years should be adjusted to reflect some or all of the costs of a scheme if Anglian Water, Northumbrian Water, Southern Water or South East Water include it in a 2026 cost change application.
Deadline to submit representations on, or objections to, the proposed modifications is Wednesday 27 May 2026. These should be sent to Ofwat:
- Via email to: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
- By post to: Large gated schemes licence modification consultation response. Ofwat, Centre City Tower, 7 Hill Street Birmingham B5 4UA
Click here to download the consultation paper
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