Ofwat Innovation Fund Consultation

Ofwat’s proposed competition approach for 2022-25

Ofwat have been operating the innovation fund since January 2021 as a pilot period and are encouraged by the level of interest, collaboration, as well as the quality and types of entries seen to date.

Over the next three years (2022-25), Ofwat have identified some key areas where further evolution of the fund could be beneficial:

  • supporting more early-stage ideas through the innovation fund;
  • allowing innovators to have greater access to the fund;
  • encouraging a wider range of innovations to come forward, including from other sectors;
  • reducing barriers to involvement with the fund;
  • facilitating new relationships and collaborations across the sector and from other sectors.


Ofwat propose to maintain the Water Breakthrough Challenge Catalyst and Transform streams for 2022-25:

Catalyst stream –  aims to encourage new ways of working that go beyond business-as-usual innovation practices in the water sector, in particular, increasing and improving collaboration and building partnerships from within and outside the water sector. Ofwat propose to:

  • Make circa 6 million available for entries between £250,000 to £1 million;
  • allow anyone to be a lead entrant in partnership with any organisation;
  • require a 10% mandatory financial contribution to enter;
  • allow background IPR to be licensed, plus maintain the option for entrants to propose an alternative IPR approach. Foreground IPR must be shared with water companies in England and Wales.


Transform stream – aims to spark ambitious innovation and enable new approaches and ways of working, equipping the water sector to address the big challenges it faces, driving far-reaching and long-lasting benefits to customers, society and the environment across England and Wales now and into the future. Ofwat propose to:

  • make circa £30 million available for entries between £1 million and £10 million
  • require lead entrants to be a water company or a NAV. Any organisation can be a partner
  • require a 10% mandatory financial contribution to enter
  • allow background IPR to be licensed, plus maintain the option for entrants to propose an alternative IPR approach.


New Competition:

Ofwat want to ensure that there is a clear pathway for ideas and projects to progress beyond the new competition, either through the Water Breakthrough Challenge or through direct development/adoption by water companies or the supply chain. Therefore, to support more early-stage ideas and encourage direct involvement of innovators with the fund, Ofwat have proposed to:

  • allocate a portion of funding (circa £4 million a year) to a new competition focused on enabling and supporting earlier stage idea development (entries up to £250,000);
  • allow anyone to put forward a bid without the need for a water company to lead an entry;
  • have minimal eligibility criteria, for example no IPR conditions or mandatory financial contributions; and
  • have a streamlined entry process.


For either the Catalyst, Transform or New Competition, Anglian Water are looking to support applications that align with our values and business & customer needs. This support could be helping to write bids, providing funding contributions, supporting with research and giving access to facility and testing support. Once submitted, applications will be reviewed internally by subject matter experts in Anglian Water and the Innovation teams.

For more information, the Innovation fund consultation appendix can be accessed at the bottom of this link.

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