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Table 1: The asset health challenge in numbers.
Money follows breakages rather than getting ahead of them. The Independent Water Commission, in its interim report of 3 June 2025, found that many companies still lack a clear understanding of the condition of their assets, and that funding for renewal rests on what was spent before and what has already failed rather than on a forward-looking assessment of risk.
The Commission wants a national fix:
Because nobody can plan around records they do not trust. Accuracy has been neglected for years in the UK, and the result is that asset information is treated with suspicion even inside the companies that hold it. UK Water Industry Research has published a practical framework for scoring data confidence and improving it, which is the necessary first step before any of the forecasting works.
The Commission's own description of the gap:
Ageing pipes, patchy records and a habit of patching things up feed each other. Fixing the records is the one that unlocks the other two.
Leakage. England and Wales lose less water per person per day than Scotland or Northern Ireland, and have done consistently for years. The longer record is better still. Average leakage has come down from roughly 5,000 megalitres a day in the mid 1990s to a little over 3,000 today, and companies have committed to further cuts for 2025 to 2030.
Figure 1: Leakage across the UK in litres per person per day, England and Wales against Scotland and Northern Ireland, 2018 to 2019 through 2023 to 2024
Figure 2: Average annual leakage in England and Wales in megalitres a day since 1992 to 1993, with the targets set for 2025 to 2030.
One caveat on the comparison: collection and monitoring standards have not been consistent across those years or between the four nations.
The same ageing pipes on a far bigger scale, split between thousands of operators too small to fix them.
American drinking water runs through more than two million miles of underground pipe. Some was laid in the nineteenth century. Pipes laid after the Second World War were built to last 75 to 100 years, so even the newer stretches are running out of time, and by 2023 the average life expectancy across the network had dropped to just over 78 years, six years lower than the 2018 figure.
The bill has gone up to match. The Environmental Protection Agency's 2023 needs assessment puts the cost of getting American drinking water infrastructure into good repair at 625 billion dollars over 20 years, about 30 percent more than it estimated in 2018, and projects 9.2 million lead service lines still in the ground. The American Society of Civil Engineers counted it differently and got to much the same place. It put the gap between what is needed and what is being spent at 309 billion dollars in 2024, widening to 620 billion dollars by 2043.
Figure 3: How the assessed 20-year need splits between distribution and transmission, treatment, storage and source.
Source: American Society of Civil Engineers, 2025 Report Card for America's Infrastructure, using Environmental Protection Agency data.
Figure 4: The Environmental Protection Agency's 6th Drinking Water Infrastructure Needs Survey and Assessment. The 2018 twenty-year need and how the four-yearly survey allocates state revolving fund money.
Source: United States Environmental Protection Agency.
The 6th survey shown in Figure 4 has since been superseded. The 7th assessment, published in 2023, raised the twenty-year need to 625 billion dollars. Retrieved 3 September 2026. Table 2 sets the two category breakdowns side by side.
Table 2: United States drinking water investment need by category, billions of dollars. The first column is the total 20-year state need by category as published in the 2025 report card, using Environmental Protection Agency data, and its total is the sum of the five published categories. The second column is the 2018 sixth survey. The seventh survey, published in 2023, raised the national total to 625 billion dollars and is reported separately.
Size is only half of it. More than half of America's roughly 50,000 community water systems serve fewer than 500 people each. A utility producing a few thousand gallons a day has a small customer base to bill, little cushion against a plant closure or a bad year, and real difficulty hiring and keeping qualified operators. Those utilities record more water quality violations than larger ones, and they often lack the staff to chase the government grants aimed at exactly their situation. Rural and lower-income households depend on these utilities more than anyone else, so the shortfall lands on them.
For reference, in the 2025 infrastructure report card American drinking water was graded C minus and wastewater D plus, both unchanged since 2021. Retrieved 3 September 2026.
State regulators examine a company's engineering and its finances, not just whether it is meeting environmental rules. That gives them a direct line between the physical state of a pipe and the funding available to replace it, and it pushes companies towards replacing things before they break.
There is no single national asset health standard in America. The states show it can be done without one.
Merged them. About 250 consolidation projects have completed across the state since 2015, most in small rural communities whose access to safe drinking water was precarious. Consolidation can mean physically connecting one system to a neighbour, or an administrative merger that leaves the pipes where they are and changes who runs them.
The state supports this through its drinking water partnerships and consolidation programme, funded largely by the Safe and Affordable Funding for Equity and Resilience programme. Work by the Environmental Policy Innovation Center finds that nationally the pace is still well short of what public health requires.
One at a time, in person. Regulators there deal directly with utilities, small ones especially, checking the state of the assets and testing whether the maintenance and renewal plans address what is coming as well as what has already happened.
The North Carolina Utilities Commission is the oldest regulatory body in the state government, descended from the Railroad Commission of 1891, and it sets rates and service standards for every investor-owned utility in the state, water and wastewater included. Its Public Staff, about 80 people including accountants and engineers, investigates company filings and audits their records, and takes part in almost every case that comes before the Commission.
The Commission thinks it should do both that and the benchmarking it does now. Comparing companies against each other protects customers from monopoly pricing, but a league table cannot tell you whether a particular company's renewal plan is sound. Closer, company-specific engagement would.
Figure 5: Lessons and opportunities for the UK.
The five lessons drawn from American practice: a supervisory regulatory approach, strategic consolidation, engineering expertise in regulation, nature-based solutions, and building a resilient future.
Source: MCC Economics
At the margins, where small operators still exist. The UK does not have thousands of small operators, but it does have small private water networks, systems built for housing developments, and failing wastewater works in remote places. Any of those could be absorbed by a larger company or supported through a regional alliance.
California is worth borrowing from because its scheme was built to get investment and expertise into places that could not raise either on their own. Ofwat could identify the UK candidates and then either pay companies to take them on or remove whatever currently stops them, which would cut the risk of a bad failure in an outlying system.
Ask for the evidence directly. Standardised asset condition reports, certified asset management systems, and inspections by engineers who go and look. Some American regulators already require all three as part of economic oversight.
Ofwat has started down this road. Its asset health update paper sets out priority asset categories, including service reservoirs, boreholes, filters and sewers, and a data collection exercise to work out where targeted investment allowances should go.
Figure 6: Ofwat's plan to improve asset health understanding during 2025 to 2027. From the asset inventory in early 2025 through condition surveys and analysis to iterative refinement from 2027.
Source: Ofwat, Enhancing asset health understanding in the water sector update paper.
Requirements like these push asset condition up to board level. A company that has to show a regulator its condition data, and face consequences if the data is poor, will pay attention to it.
They keep water out of the pipes. That is the cheapest way to make a pipe last longer. Dŵr Cymru Welsh Water's RainScape programme uses basins, planters and swales to hold and filter rainwater before it reaches the sewer, adding capacity and taking pressure off the built network.
Figure 7: Community rainwater and stormwater capture and use.
How retention ponds, infiltration basins and cisterns cut demand for potable water and reduce combined sewer overflows.
Source: United States Environmental Protection Agency, Water reuse.
Less water and less pollution passing through a sewer means a sewer that lasts longer. American cities have reached the same conclusion, running green infrastructure alongside conventional renewal rather than instead of it.
Figure 8: Stormwater control measures built each year in Portland.
Normalised by the size of the city, against impervious surface change and population density, with the regulatory milestones that shaped them.
A sector that repairs assets before they fail, that regulates with engineers in the room, and where the organisations involved share what they know. American practice in consolidation, direct regulatory engagement and engineering-led oversight offers the UK a way to close its own gaps.
The direction is already set. Ofwat's asset health work and its consultation both treat resilience as central, and the Commission's final report of 21 July 2025 develops the same themes. Getting there needs economic regulators, environmental agencies, water companies and the communities they serve to work from the same evidence.
The full publication sets out the regulatory and market context behind this analysis, including the detail of the Commission's findings and the American state-level practices summarised here. It is available through the preview link on this page.
A companion publication, Parallels and Differences between the US and UK Water Sectors, sets out the regulatory, ownership and planning differences that shape how each country approaches asset condition.
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