Skip to content
Type
News

UK water sector’s capacity crisis threatens to stunt GDP growth

Date
11 April 2025

The industry must be allowed to act decisively to stand a chance of meeting future demand, experts warn.

Aerial view of a reservoir in the Axbridge village in Somerset, England on a cloudy day.
Building reservoirs can help address rising demand for water, but the planning process can take decades. Image credit: iStock/Alexey Fedoren

Capacity limitations in the UK water sector could scupper the government’s economic growth plans, according to experts in the field.

Speaking at the ICE’s Spring Prestige Debate, they revealed that some water companies have no headroom left.

One of the panellists was Dr Geoff Darch, head of strategic asset planning at Anglian Water, which supplies the UK’s driest region. He reported that its resourcing plan had factored in trends such as population growth, rising demand from data centres for cooling water and the increasing impact of droughts.

Noting that Anglian had accounted for all resources available to it, Darch said: “We don’t have any more options.”

But more water will be needed to support developments including the Oxford-Cambridge corridor, which the government calls an “economic engine”. This area alone could need 1,020,000 more homes by 2050.

Stakeholder support required

The sector must therefore enact a package of measures (see panel) to solve the problem. This will require government backing and, in some cases, regulatory reform.

Water companies must also win public support, especially for some of the more contentious solutions. So said panellist Dr Heather Smith, senior lecturer in water governance at Cranfield University.

This would have been difficult even before consumers saw big increases to their bills this year. Yet vital capacity-building work must be funded.

“It’s essential to have reasoned conversations with customers about the issues, options and trade-offs,” Smith stressed.

Solutions open to water companies

  • Building reservoirs. A few schemes are in progress. Southern Water and Portsmouth Water have got the furthest with their planned reservoir at Havant Thicket, Hampshire. But even the planning process can take decades, so more developments are needed.
  • Wastewater recycling. This forms part of the Havant Thicket plan. Consumer engagement will be vital in overcoming the so-called yuck factor.
  • Desalination. With the wider availability of renewable electricity, this method’s carbon footprint is shrinking, but it remains energy-hungry.
  • Inter-catchment bulk water transfers. The financial and carbon costs of moving water to where it’s most needed must be considered carefully.
  • Rainwater harvesting. This can involve storing rainwater for direct re-use via a dual supply system. New housing developments offer the potential to pioneer this method.
  • Fixing leaks faster. Firms are already using advanced tech to boost repair efficiency.
  • Managing demand. Metered households typically use a third less water than unmetered equivalents, but the sector must develop more incentives if it’s to cut consumption further.

About the event

The Spring Prestige Debate was convened to discuss one of the three main issues highlighted by the institution’s State of the Nation report. It was chaired by David Porter, ICE Senior Vice President.

The other panellists were Rhys Cotterell (AtkinsRéalis); Neil Gardener and Mark Tindale (Stantec); and Simon Harrow (Ofwat).

  • Andrew Mylius freelance journalist specialising in the built environment