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The PR24 final determination sets a total expenditure allowance of £104 billion, funding the largest investment programme in the sector since privatisation. The determination covers the five years from April 2025 to March 2030, the period the industry calls AMP8. Ofwat set out what the settlement buys, and what it costs customers, in these terms:
The sector has access to funding on a scale it has not seen before, but it also faces a financing problem before the money can be spent. Companies forecast a need to raise over £7 billion of equity to support their investment programmes. Some companies proposed restricting dividends to support delivery of investment. Ofwat expects companies to revisit their financing plans now the determinations are final, and says that in some cases they will need to take steps to strengthen financial resilience.
Water bills rise substantially under AMP8, and by how much depends on whether the figure is quoted before or after inflation. In 2024–25 prices, the average water and sewerage bill rises from £440 to £597 by 2029-30, an increase of £157 or 36%. In cash terms, which is what customers actually pay, the average water and sewerage bill rises from £484 to £730, an increase of £246 or 51%. Increases vary widely by company: Southern Water customers face 53% in real terms, Northumbrian and Wessex customers 21%. Water UK's own consumer site forecasts an average combined bill of £639 for 2026-27, close to the £628 implied by the determination.
Table 1. Average household bills by company, 2024-25 to 2029-30.
Figure 1. Average household bill by company, 2024-25 and 2029-30
Table 2. Average household bills in cash terms, 2024-25 to 2029-30
Figure 2. Average bill trajectory in cash terms, 2024-25 to 2029-30
The sector faces a pipeline of water infrastructure investment larger than it has handled before, raising a serious question about whether there is sufficient capacity to deliver it. Water UK and the government have agreed to recruit 50,000 people into the sector by 2030, including up to 5,000 apprentices. Industry estimates of total need run higher still, at around 100,000 new workers once retirements are counted. Demand for carbon-intensive materials such as concrete and steel is expected to tighten supply and raise costs, and increased demand for both materials and labour may feed inflation in the construction sector.
The environmental targets are specific, quantified and time-bound, making them more measurable than those of earlier programmes. Alongside the determination, a statutory 10% biodiversity net gain applies to development. On nutrients, the largest single environmental commitment, Ofwat sets out both the scale of the programme and what it expects it to achieve.
Table 3. Headline environmental targets for 2025-30
How the money gets spent. The determination fixes allowances, outputs and incentives, all of which sit within Ofwat's remit. It cannot create engineering capacity, it cannot compel equity markets, and it cannot make procurement rules work for suppliers the sector needs. Those constraints sit with government, with companies and with the supply chain, and AMP8 will be judged on them rather than on the settlement itself.
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