Ofwat is consulting on changes to charging rules in the form of a common framework for water companies to offer stronger and more standardised environmental incentives to developers to encourage them to build new homes that are more water efficient and with sustainable drainage.

The consultation relates primarily to English water companies, for which Ofwat regulates developer charges through new connection charging rules. Developer services for Welsh water companies are subject to a different regulatory regime. However, Ofwat thinks some of the proposals are transferable and welcome views on this as part of this consultation.

From consultation summary

Many water companies currently offer developers discounts on their new connection charges for meeting certain standards of water efficiency or sustainable drainage. We call these environmental incentives.

We are consulting on establishing a common framework for environmental incentives, through changes to our charging rules, with the aim that they result in greater water efficiency and / or more sustainable drainage across all types of new development. We think that for environmental incentives to be effective, they should: be transparent; be stable and fair; support innovation; be accessible to all; complement wider policy; and build trust and confidence. We want the common framework to be consistent with and supportive of such characteristics.

The construction of sustainable homes brings benefits to many stakeholders, including: the environment; homeowners; developers; water companies; society; and manufacturers. A common framework for all water companies could influence developer behaviour more effectively, particularly with developers operating on a regional or national basis. They would be able to see the benefits of building more sustainable homes more easily and be able to adopt a standard approach to home building irrespective of which company’s area they operate in, potentially improving their own efficiency and reducing costs.

Link to full consultation document.