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This MCC paper explores what resilience really means for water systems, and why the UK can learn from US tools and case studies as pressures from climate change and ageing assets intensify. Discover actionable strategies to strengthen planning, regulation, and long-term service reliability.
Starting from themes raised by the Independent Water Commission (IWC), the paper frames resilience as the ability to absorb shocks (like droughts and floods) while adapting to long-run challenges. It identifies shared UK/US issues, ageing infrastructure, fragmentation, and extreme weather, and explores US case studies (including consolidation approaches and more hands-on supervisory regulation) that could inform UK policy and regional planning. The note emphasises that resilience must be tackled at system and governance levels, not treated as a narrow technical afterthought.
Resilience in the water sector has been a point of attention for quite some time. Climate change, population growth, and ageing infrastructure place unprecedented pressures on water systems in both the US and the UK. These challenges highlight the shared need to ensure safe and reliable water services while also protecting environmental and social outcomes.
On their recently published interim report, the Independent Water Commission (IWC) noted concerns with the UK water systems, such as supply chain capacity for necessary investments and management arrangements that do not fully address the regional water systems demands.
We use the IWC report as a starting point to explore how solutions already tested in the US could help build a more resilient water sector in the UK, drawing parallels and highlighting opportunities for cross-Atlantic learning.
A number of stakeholders, including the NIC, some water companies and supply chain firms have expressed serious doubts as to whether the supply chain has the capacity to undertake the huge increase in investment set out in Price Review 2024. This is in part due to the pressure on some parts of the chain from other sectors where major investment plans are in train. But they also point to the scale of the jump in the level of water industry investment. For example, the combined Water Industry National Environment Programme (WINEP) and National Environment Programme (NEP) averaged around £5.4 billion in the price reviews from 2004 to 2019 before jumping fourfold to almost £24 billion in Price Review 2024 (2022/23 prices).
At present, there is a complex patchwork of system planning and management arrangements in England and Wales that does not effectively bring together all the demands on regional water systems, the challenges that need to be met and all the actors that have an impact on water. The Commission has heard that local voices are lost in the system.
Water system resilience extends beyond ensuring pipes and treatment plants are in good condition. It’s about the ability of water systems to absorb shocks – like droughts and floods – and adapt to long-term challenges. In the UK, the IWC frames resilience as a “strategic imperative”, highlighting that it must be addressed at the highest levels of planning and regulation, not just as a technical afterthought. In the US, resilience emerges through a complex interplay of federal environmental standards and state-level economic regulation, requiring an ongoing balancing of affordability, environmental protection, and infrastructure renewal.
While regulatory frameworks differ, some challenges are remarkably similar.
In the UK, the IWC exposes a clear recognition that asset health is not well understood and that renewal plans are often driven by past failures rather than proactive assessments. In the US, ageing infrastructure is a major concern, particularly for small systems that lack the resources for regular maintenance and renewal.
The Commission has heard that there is a lack of underlying condition data for water company assets in England and Wales.
Given that the underlying legislation and regulatory framework is not fully prescriptive, English and Welsh companies have taken different approaches to managing their large and complex asset bases.
To fill mapping gaps, for instance, the Commission has heard that one company follows a “map as you go” principle to build up knowledge during routine maintenance, while another maps reactively only on failure of the asset.
While Ofwat have published a roadmap for improving the understanding of asset health, it is not mandatory for companies, and it is not clear to what extent companies are engaging.
Moreover, although Ofwat noted that they had collected asset condition data on 70% of assets in Price Review 2024, these are at least partially based on failure metrics alone (such as sewer collapses, mains repairs and unplanned outages) rather than providing a prognostic assessment of asset health.
The below figure shows the difference in pipe age between Thames Water and Severn Trent Water assets, with Severn Trent having a younger average age of pipe, suggesting that companies will face different challenges on asset maintenance going forward due to their asset endowment.
One of Ofwat’s concerns brought up in the IWC report was that the UK water sector experiences fragmented planning and decision-making, complicating coherent responses to environmental and supply challenges. Similarly, in the US, many states like Georgia and North Carolina have thousands of small systems that struggle with staffing, investment, and ensuring affordability for customers.
The UK and Welsh governments have sought to provide strategic direction on growing environmental, social, and financial pressures and demands on the overall water system – including in the Water Strategy for Wales (2015) and the UK Government’s Plan for Water and its Environmental Improvement Plan, both published in 2023. However, the Commission has heard that these plans have not effectively articulated prioritisation or provided accountability mechanisms to ensure they are delivered. Ofwat has commented that, historically, “investment in the sector has been the result of fragmented water company planning and prescriptive environmental investment programmes with relatively little strategic direction from Government.”
In England, existing strategies have focused heavily on narrow targets, processes and policy decisions, and have not effectively considered costs, articulated priorities or set out system-wide outcomes. Importantly, they contain little-to-no guidance on how regulators should strike a balance between potentially conflicting targets and outcomes, for example, how the regulatory system should balance affordable bills for customers with enabling water companies to deliver the investment needed to meet required environmental standards.
IWC interim report page 22, June 2025
Number of Community Water Systems and System Size
In the United States, 83% of community water systems serve fewer than 50,000 people. Despite this high percentage, these smaller sized systems serve only 8% of the population. In comparison, the remaining 17% of community water systems consists of larger water systems that serve over 250 million people. The majority of community water systems serving fewer than 10,000 people use ground water as their source. Most Americans are served by community water systems that serve greater than 100,000 people and use surface water as their source.
The UK’s National Infrastructure Commission (NIC) has warned that in the next 30 years, there is a one-in-four chance of significant water supply disruptions due to climate pressures. In the US, states such as North Carolina and Indiana are increasingly focused on drought resilience and future demand management to prepare for similar climate- driven challenges.
Equally, there are growing environmental, demographic and financial pressures on the water system. For example, the National Infrastructure Commission (NIC) estimates there is a 1 in 4 chance over the next 30 years that large numbers of households in parts of England will have water supplies cut off for an extended period due to severe drought.
IWC interim report page 19, June 2025
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