Water demand Environment Act target delivery plan
Statutory Environment Act target
Reduce the use of public water supply in England per head of population by 20% by 2038 from a 2019 to 2020 baseline.
Interim targets
Public water supply:
Reduce the use of public water supply in England per head of population by 9% by 31 March 2027 and by 14% by 31 March 2032 from a 2019 to 2020 baseline.
Leakage:
Reduce leakage by 20% by 31 March 2027 and by 30% by 31 March 2032 from a 2017 to 2018 baseline.
Rationale for the interim targets: why and how they will progress delivery of the Environment Act target
Our interim targets are ambitious and will help achieve the long-term target. The targets have been largely adopted by the industry and form a key basis of water companies’ Water Resource Management Plans (WRMPs).
Our calculations, conducted in 2022 using WRMP19 forecast data, showed that, if all commitments and proposed policies are implemented as expected, we could overdeliver the long-term target by up to approximately 54%. Having extra policies and delivery interventions in place enables us to maintain our delivery confidence in both the interim and long-term targets. By the end of 2026, we will conduct an updated analysis of our commitments and proposed policies which will take into consideration the latest context and new data. This will provide an up-to-date picture of our target trajectories.
The latest Environment Agency (EA) summary of Water Resource Management Plan Annual Review data shows that water demand has fallen in 2024 to 2025. As of 2024 to 2025, public water supply per person is 5.1% below the 2019 to 2020 baseline. This is where we would expect it to be at this early stage of target delivery, and it will be important that this downward trend is maintained to meet the target. Our interim targets provide us with a strong base to meeting our statutory target and we will continue to work to accelerate progress against this through our activities.
Realisation of the interim leakage target is dependent on water companies reducing leakage to their committed levels. We are working alongside Ofwat to ensure performance against this target is embedded through performance commitments and the 2024 Price Review (PR24). PR24 represents the largest investment programme in the water sector for 30 years. This provides a step change in funding and incentives to drive sustained leakage reduction and support delivery of our targets.
Delivery measures
Government is not responsible for all the levers expected to contribute to the statutory and interim targets, and so we have included additional policy and delivery interventions to provide additional headroom.
Table 1: Summary of leakage and water demand reduction measures and supporting evidence under the water demand delivery plan
| Delivery measure | Description | Estimated contribution to the interim targets | Evidence of impact | Responsible | Status |
|---|---|---|---|---|---|
| Ofwat regulation | We will work with Ofwat (Water Services Regulation Authority) to hold water companies to account for delivering leakage reduction targets through Ofwat’s rewards and penalties. Water companies have already committed to reducing leakage by 50% by 2050. We will work with Ofwat to ensure they remain on this trajectory which will help drive water demand down. | High | Leakage has reduced by an estimated 12.4% since 2017 to 2018. Ofwat’s PR24 Final Determinations require companies to cut leakage by 17% over 2025 to 2030, backed by around £700 million for pressure management, leak repairs and mains replacement. Water companies have also committed to halve leakage by 2050. The Strategic Policy Statement, which sets out Defra’s expectations of Ofwat, outlines that we expect Ofwat to hold water companies to their leakage trajectories through incentives and penalties. |
Ofwat | In delivery |
| Accelerating Smart meter rollout | We will consider policies or standards associated with water usage data to enable water companies to incentivise more water efficient behaviours and reduce leakage, including amplifying the benefits of the smart meter rollout. In our Water White Paper, we have committed to unlocking barriers to accelerate the rollout of smart metering and expanding customer access to smart meter data. There is clear evidence this will deliver better outcomes, fairer bills and improved water resilience. |
High | Water companies are aiming to install approximately 10.4 million smart meters over 2025 to 2030, increasing smart metering to around 50% of households and businesses by 2030. Moving from unmetered to smart metered can reduce consumption by up to 17%, while smart meters also improve leakage detection and customer access to usage data. |
Defra and Ofwat | In development |
| Mandatory water efficiency labelling scheme (MWELS) | We will introduce MWELS on water using products such as showers and toilets. This will allow consumers to be better informed around their water usage. The label will also give customers more information to help them make informed decisions about water efficient products when purchasing. |
Medium low | MWELs is a key government intervention to support consumers to use water more efficiently. It is expected to meet around 20% of the remaining supply-demand gap by 2050. MWELs could save consumers £56 million on water bills and £69 million on energy bills over 10 years, with cumulative water savings of 22,509 ML. The label is intended to shift purchasing towards more efficient products and remove poorer-performing products from the market over time. |
Defra | In development |
| Introduce minimum standards | We will consider introducing minimum water efficiency product standards and design guidance to reduce water wastage and remove inefficient or unclear products from the market following the launch of MWELS. | Medium low | Minimum product standards would complement the label by removing the least efficient products from the market and setting a clear maximum flow performance threshold. The label plus standards could help meet an additional share of the 2050 gap by driving more efficient product uptake. In addition, they could reduce water wastage and encourage innovation and competition among manufacturers. |
Defra | In development |
| Review water efficiency standards in Building Regulations 2010 | We will work with Ministry of Housing, Communities and Local Government (MHCLG) to explore whether the Building Regulations 2010 could be further amended to tighten water efficiency standards and enable consumers to use less water and save on their water and energy bills, as well as to assess where planning policy can enable water efficiency at the point of housing delivery. This could see an amended standard in Part G of the Building Regulations being introduced for new homes in England through fittings from 125 l/p/d (litres per person per day) to 105 l/p/d, and 100 l/p/d where there is a clear local need (such as in areas of water stress). We will also review the water recycling and drainage standards in Part H of the Building Regulations 2010, to enable water reuse. |
Medium low | Tightening water efficiency standards in Building Regulations from 125 litres per person per day to 105 litres, and to 100 litres where there is clear local need will support the statutory demand target. It will help unblock development in water-scarce areas. It will also save families over £111 a year on water and energy bills in new homes. A reduction of 20 litres per person per day could unlock an additional 1,000 homes for every 5,250 homes built. |
Defra, MHCLG, Building Safety Regulator (BSR) | In development |
| Review planning policy and processes in new household development | We will progress work to consider the role of water companies in large scale development, following the recommendations of the Independent Water Commission for an enhanced role in this process. In our Water White Paper, we committed to facilitating the adoption of reused water, including through planning. We also committed to reviewing the right to connect to water supply for domestic and non-domestic purposes. This will look to solutions such as water reuse options, water efficient retrofits and dual pipe systems. |
Low | Stronger planning and earlier water company involvement will help ensure new developments are designed around water efficiency and local water constraints from the outset. The interventions in the White Paper support a more joined-up planning framework. Tighter local standards are already being used in areas such as Cambridge and North Sussex where water scarcity is constraining housing growth. Better alignment between planning and water management should reduce future water-related barriers to development. |
Defra, MHCLG | In development |
| Enable water reuse in new household development | We will review and amend relevant legislation as appropriate to address wasteful product issues with toilets and enable new water efficient technologies. | Low | Water reuse systems can reduce demand on potable water supplies, lower carbon emissions and improve flood resilience. Customers with reuse systems may see lower bills. Additionally, dual pipe and reuse systems can reduce abstraction pressure while supporting wider drainage and storm overflow benefits. Government is reviewing the relevant regulatory framework to enable these systems at development scale. |
Defra, MHCLG | In development |
| Review planning for non-household development | We will review planning policy and processes and investigate water reuse options for new non-household development. Consider voluntary schemes for non-household buildings and work with MHCLG and local authorities to improve knowledge and guidance of water reuse in planning processes. | Low | Water reuse in non-household settings can materially reduce pressure on potable supplies and free up water for homes and priority infrastructure. Greywater and rainwater reuse can reduce water consumption in some non-household settings by approximately 50 to 75%, including for large users such as data centres. This would support growth while improving resilience and reducing the risk of non-household water moratoriums. |
Defra, DWI, MHCLG | In development |
| Work with partners to reduce non-household usage | We will work closely with the retail Market Operator of England’s non-household Water Market (MOSL), regulators, water companies and retailers to identify options to drive non-household demand down. This includes through MOSL’s Market Performance Framework (MPF) standards, Ofwat’s new non-household performance commitment for water companies to reduce business demand for water (including managing penalties and rewards) and reviewing tariff structures in the non-household market to better understand incentives for water efficiency and demand reduction. | Low | Non-household consumption accounts for around 20% of total water demand, and the top 1% of users account for around half of that use. Reducing business demand is important for resilience and growth. Working with MOSL, Ofwat, retailers and companies on market performance, tariffs and incentives will enable the highest-using businesses to accelerate water demand reductions. |
Defra | In development |
It should be noted that, in addition to the estimated contribution ratings provided, we will be conducting further analysis against each of the measures in line with finalised WRMP24 data, which will enable us to determine approximate percentage contributions against each policy area. This analysis will be conducted by early 2026 and will provide us with greater insight into the projected impact of each measure against the statutory and interim targets.
Key milestones
Our key planned or anticipated milestones to reaching the interim targets are as follows.
Key milestones for 2025 included:
- water companies begin or continue rolling out approximately 10.4 million smart meters (2025 to 2030)
- Ofwat’s Smart Water Metering Delivery Group launched to consider Baringa report recommendations
- consultation on building regulations goes out and government response published
Key milestones for 2026 include:
- secondary legislation laid for MWELS
- Government response for the Building Regulations is published
- consultation on water recycling and drainage standards (2026 to 2027)
- legislation and policy work to enable the government Water White Paper measures has started. This will work to enable reuse through planning, and support customer access to smart meters.
Monitoring and evaluation summary
Water companies annually report water distribution input (DI) figures (including components of DI and total population) to the EA and Ofwat (through WRMP and water company annual performance reports respectively), in line with existing reporting requirements. Annual figures are taken in line with financial years from April to March. This annual data is used by the EA to monitor progress in delivering programmes to manage supply and demand, as well as those aimed at protecting the environment.
This reporting is the source of the baseline 2019 to 2020 figure and will be how the Water demand target is reported. It should be noted that targets relating to leakage will be reported using a 2017 to 2018 baseline, in line with pre-existing industry reporting processes. There are some shared water supply zones on the border with Wales where the population in England are supplied by Welsh Water, however these are not included in the baseline, nor will they be included in annual reporting.
The EA will calculate the metric annually from data provided by water companies in annual reports on their WRMPs. This reporting is statutory, but the content is defined by guidance from the EA. Reporting for the demand target will include taking data from the reports and aggregating the company-level DI data. The EA will divide the total DI (Megalitres per day) by total population (household and non-household) figures (as supplied by water companies), also provided in these annual reports, to produce a DI/population figure in Megalitres per person per day. The EA technical guidance suggests population is updated by water companies using Office for National Statistics (ONS) data or billing records but can also use WRMP forecast data for that recording year.
Additionally, guidance sets out they need to highlight and explain any changes to the demand forecast, including population and property forecasting. Detail any change to the source data set used for forecasting.
A percentage reduction will be calculated by:
By using the population figures from the WRMP annual returns, it will ensure they are consistent with those used to set the indicators (for example, DI and per capita consumption). They will be available at the same time and for the same period as the data on DI. They are more likely to be acceptable to water companies. This will also reflect the population wholly or mainly in England, for which the DI provides public water supply.
We are currently working to review existing data series associated with the target with a view to streamlining methods of reporting. Following this work, we aim to have a clear reporting mechanism by which to monitor and report on our delivery progress against the water demand target. This will also help us see how we are performing against our interim targets.
Policies that support the water demand target will be evaluated. For example, we are currently commissioning a 5 year evaluation plan for MWELS. As part of this we are also commissioning the development of a methodology to measure water usage in the home at a granular level and use this to calculate the water savings from MWELS.