Ofwat has launched a new consultation on its proposed monitoring and assessment framework for the water companies AMP8 delivery plans - the PR24 investment is the largest in the water sector across England and Wales over the last 30 years.

Image source Ofwat: Water sector annual base & enhancement capital expenditure 1989 - 2030

With an unprecedented £104 billion budget covering 2025 to 2030, PR24 is nearly twice the size of the investment profgramme at PR19. Ofwat says the increase can be largely attributed to increasing enhancement requirements, which at £44 billion are four times higher than enhancement allowances at PR19.

Nearly 90% of enhancement expenditure is driven by the requirements specified by the water resources management plans (WRMPs), the environmental programmes of the Environment Agency and Natural Resources Wales, Drinking Water Inspectorate and other statutory drivers such as the Industrial Emissions Directive.

To support the deliverability of PR24 Ofwat has introduced a series of regulatory and monitoring tools, including transitional and accelerated funding, delivery mechanism, delayed delivery cashflow mechanism, price control deliverables and delivery plans. The regulator says it expects the approach to evolve as more outturn delivery data becomes available over the five year review period.

Supply chain constraints amongst delivery challenges

Ofwat is flagging up supply chain constraints as amongst a number of delivery challenges.

The consultation paper points out that over the previous price review periods, investment profiles in the sector have been characterised by peaks and troughs, saying the supply chain has previously voiced concerns over this investment pattern.

It also points out that the step-up in investment in the water sector is happening at the same time that investment is increasing in other sectors which is likely to intensify competition for skilled labour, engineering capacity and key construction materials.

Ofwat warns in the paper:

“The investment uplift across the UK economy could further exacerbate supply chain constraints and increase delivery risks for the water sector. For example, increased pressure on supply chain could lead to extended procurement times and limited availability of contractors, particularly specialist firms.”

Delivery plans reporting

Image source Ofwat: PR24 Price Control Deliverables by area

The water companies are required to report progress against delivery plans setting out how they will achieve their Price Control Deliverables output targets over the 2025-30 period.  Reports must be made every six months (November, May) on an unassured basis. They  are also required to submit and publish an assured delivery plan progress report. The companies are due to publish their first delivery plan progress report on 17 August 2026. Ofwat will then assess the reports and intend to publish its assessment of delivery plans as part of its first delivery report in Autumn 2026.

Delivery plans collect data on outputs, expenditure and interim milestones at a PCD group level. They also collect expenditure and interim milestone data for large and/or high-profile schemes. The data collected includes both outturn and forecast information to provide visibility not only on what a company has already delivered but also on what it is expecting to deliver over the remainder of the period. Companies are also required to provide commentary to explain material variations against plan.

Ofwat will apply a supervision led approach that enables company specific oversight of delivery progress. This involves assessing information in the delivery plans, and maintaining proactive engagement with companies, to help identify any delivery issues early.

Overall draft monitoring and assessment framework

Image source Ofwat: Ofwat's proposed approach to PR24 delivery assessment framework 

Ofwat is proposing to split its assessment of delivery plans into two parts.

The first part encompasses assessing PCD output forecasts – informed by looking at the percentage of output the company is forecasting to deliver by March 2029-30. This will indicate if the company is forecasting to deliver its PCD output targets by the end of the period.

The second part involves gaining confidence on the company output forecasts - informed by the evidence provided by companies within their delivery plan reporting in relation to early works, mobilisation, programme planning, risks and assurance. Ofwat will supplement this with targeted engagement with companies and the supply chain, where appropriate. The paper says that a company that can demonstrate that it is ramping up delivery and is already delivering its PCD output targets in year 1 will give Ofwat more confidence that it is on track to meet its PCD targets by the end of the 2025-30 period.

The combination of these two parts will inform the regulator’s view of any delivery risk. Ofwat will also require independent third-party assurance on delivery plan and PCD reporting.

Addressing delivery concerns

Following its review of delivery plans, Ofwat will consider if any form of intervention is required to support delivery in relation to the companies it has identified concerns about on a case by case basis. Any form of intervention will be proportionate to the scale of the concern and the underlying causes of the identified delivery risks.

Programme planning

According to Ofwat, a successful programme starts with good planning – the regulator says it will assess whether the forecasts reported by the company in delivery plans are realistic and achievable by considering the following metrics:

• Delivery profiles
• Changes to profiles
• Percentage of schemes awarded for delivery by the end of year two
• Percentage of schemes reaching construction phase by end of year three.

Other areas Ofwat proposes to assess include cost management, data quality and consistency, risks and assurance.

Delivery Capability Assessment Framework (DCAF)

Ofwat is also currently working on developing a best practice assurance framework that will provide it with a consistent and structured way to assess the underlying delivery capabilities of a company. The Delivery Capability Assessment Framework (DCAF), will complement delivery plans by providing a tool that will help, among other things, Ofwat and companies to identify the root cause of any delivery issues, and the actions required to address them, and support PR24 delivery.

Once operational, Ofwat says the DCAF will provide a structured route to understand the source of risks identified in delivery plans, and help shape the nature and scale of any required regulatory response.

The regulator is planning to publish a draft version of the DCAF by the end of 2026.

An Ofwat spokesperson commented:

“The proposed framework, which is published today for consultation, will track the company activities set out in those delivery plans, helping us identify risks early, and therefore hold companies to account as early as possible.

“Where a water company's delivery is at risk, we will intervene where required - with steps ranging from more frequent reporting and formal engagement, to finding the root cause of the problem, closer oversight, and, where necessary, enforcement action.

“Transparency is key: companies publish their delivery plans, and we will publish our assessments of their plans, so progress and delivery risks are visible to all.”

Ofwat is seeking views from stakeholders on its proposed approach to assessing company progress against delivery plans no later than 5.00pm on Thursday 18 June 2026 - responses should be submitted to This e-mail address is being protected from spambots. You need JavaScript enabled to view it . The regulator intends to publish its final assessment framework before the end of July 2026.

Click here to download the consultation paper in full