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Strategic report
OCU Group | Annual report and financial statements 2025
Governance
Financial statements
Market opportunity
Water
UK water & wastewater infrastructure market outlook (AMP8 2025–2030) The UK’s regulated water sector has entered the latest regulatory period, AMP8 (2025–2030) with a record investment program. Ofwat’s final determinations for the 2024 price review (PR24) approved £104bn in expenditure for England and Wales – a 71% increase versus the last AMP cycle. This near-doubling of spend reflects robust regulatory support for infrastructure renewal and growth, providing a stable pipeline of work over the next five years. Water companies are expected to deliver major upgrades to improve service resilience and environmental performance, backed by predictable regulatory funding and incentives.
Resilience and environmental upgrades Key priorities in AMP8 include system resilience, pollution reduction, and decarbonisation – with initiatives including:
Water supply resilience Around £6bn is allocated to secure water supplies including the development of nine new reservoirs and seven regional transfer schemes. Companies must also replace ~8,000km of water mains (a 400% increase from AMP7) to reduce leakage and burst risks. Framework projects like the Vyrnwy Aqueduct relining (66km of pipeline) are underway to improve supply reliability and water quality. Storm overflow mitigation Utilities will invest almost £12bn to curb sewer overflows, targeting a 45% reduction in spills by 2030 relative to 2021 levels. This includes upgrading thousands of outfalls and expanding network capacity. Ofwat has earmarked £1.4bn specifically for nature-based and catchment solutions to tackle stormwater surges, such as constructed wetlands and sustainable drainage, which provide cost‑effective resilience.
Water recycling & nature-based solutions
To enhance drought resilience, the sector is funding twelve new water recycling plants that will reuse treated wastewater, adding up to 425 million litres per day of supply by 2030. Overall, water companies plan over £2.2bn in nature-based projects across water and wastewater services, from wetland nutrient removal to catchment management, delivering environmental benefits alongside core outcomes. Net zero 2030 commitments The industry’s net-zero carbon target for 2030 is driving investment in energy efficiency, biogas and renewables. Ofwat has introduced new performance targets to cut operational greenhouse gas emissions, aligning with Water UK’s pledge to eliminate 10 million tonnes of CO 2 e by 2030. This accelerated decarbonisation (20 years ahead of the UK economy’s 2050 goal) underscores the sector’s technical innovation and will require upgrades like electrified fleets, process optimisations, and carbon offsetting through nature-based schemes.
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