Five water companies appealed Ofwat's PR24 price determination. The CMA issued its final verdict in March 2026. Here is what settled, what changed — and what it means for £104bn of infrastructure spend.
PR24 — the Price Review 2024 — is the regulatory process through which Ofwat determines how much water companies in England and Wales can invest and what they can charge customers for the five-year period from April 2025 to March 2030. It is the mechanism that funds AMP8: the eighth Asset Management Period and the largest investment programme in UK water sector history.
Ofwat published its final PR24 determinations in December 2024, confirming a total allowed investment of approximately £104 billion across all regulated water companies. This figure — unprecedented in the sector's history — covers base expenditure (maintaining existing assets), enhancement expenditure (improving service levels and meeting new obligations), and the transformational investment required under the Government's Water White Paper and storm overflow reduction targets.
The determination sets the allowed revenue each water company can earn, the return on capital (the Weighted Average Cost of Capital, or WACC) investors are permitted to receive, and the performance commitments companies must meet or face financial penalties. Getting these numbers right matters enormously — for companies, for investors, and for the supply chain companies who need financial confidence from their clients before committing resources to AMP8 frameworks.
Ofwat's December 2024 final determination was not universally accepted. Five companies — Anglian Water, Northumbrian Water, South East Water, Wessex Water and Southern Water — formally referred their determinations to the Competition and Markets Authority (CMA) for a statutory redetermination. Under the Water Industry Act 1991, any company that believes its price determination is fundamentally flawed has the right to ask the CMA to conduct an independent review.
The core grievance across all five appeals centred on allowed financial returns. Water companies and their investors argued that Ofwat's assumed cost of capital was too low given the significant rise in interest rates since 2022. Infrastructure investment at the scale required by AMP8 requires long-term debt financing. If the allowed return does not adequately compensate investors for the risk they bear — relative to returns available elsewhere — investment will be constrained.
A higher allowed WACC means slightly better revenue for the five appealing companies — which directly improves their financial headroom to honour framework commitments, pay contractors on time, and maintain the pace of procurement through AMP8. It also reduces any risk of emergency cost-cutting mid-programme on the affected frameworks.
Notably absent from the appeals were Thames Water, Yorkshire Water, United Utilities and Severn Trent — four of the largest spenders in AMP8. Thames Water, already under Ofwat's Turnaround Oversight Regime (TOR) due to its well-documented financial difficulties, accepted Ofwat's determination as a condition of its restructuring process. The other three accepted the determination without appeal.
The CMA's role in a water sector price redetermination is a full, independent review of the relevant company's determination — not simply an arbitration of the WACC dispute. The CMA assesses the totality of the determination: cost allowances, performance commitments, financial returns, and the overall package of obligations and funding.
The process for the five PR24 referrals ran through 2025. The CMA conducted a thorough review — publishing provisional findings, consulting on those findings, and then issuing final determinations. The CMA issued a summary of its final determinations on 10 March 2026, with the full determinations published on 26 March 2026.
The CMA confirmed the overall investment level at approximately £104bn. On allowed financial returns, the CMA's determinations provided modestly improved terms for the five appealing companies relative to Ofwat's original FD — consistent with historical precedent in water sector redeterminations. The precise WACC adjustments varied by company.
The fundamental investment programme is unchanged. The £104bn of planned AMP8 expenditure across all water companies was confirmed in full. If you were waiting to see whether the CMA process might result in a material reduction to the investment envelope — and many supply chain companies were — the answer is no. The capex is real, it is confirmed, and it is proceeding.
Performance commitments — the legally binding service level targets each company must meet, and the associated penalties for failure — also remain in place in their original form for the five referred companies. The CMA did not seek to significantly restructure the performance framework.
The five companies that went to CMA received marginally improved financial terms. This matters less to the supply chain than the total investment quantum — but it does provide several benefits downstream:
For the water sector supply chain, the single most important consequence of the CMA's March 2026 final determinations is certainty. Prior to the determinations, a small but real question existed in the market: could the CMA reduce investment plans, restrict spending, or introduce new conditions that change what framework holders are able to award? The answer from March 2026 onwards is definitively no.
Every regulated UK water company now has a confirmed, legally binding AMP8 determination. Every spending commitment is backed by the regulatory framework. Every framework appointment made since April 2025 has the full force of a confirmed price determination behind it.
If you delayed pursuing framework positions with Anglian, Wessex, Southern, Northumbrian or South East Water pending CMA clarity, that rationale is now gone. These companies are in active procurement. The window for getting on AMP8 frameworks with these operators is open — but most frameworks close their initial appointment rounds within the first two years of AMP8.
It is worth stepping back from the CMA process to understand the full scale of what PR24 actually commits the sector to delivering between 2025 and 2030:
With the CMA process concluded, the water sector enters a period of maximum procurement activity. The first two years of AMP8 (2025–2027) are historically the busiest for framework appointments, as water companies lock in their delivery supply chains. Many of the largest frameworks were already appointed before the CMA determinations; the remaining procurement — particularly for specialist sub-lots, professional services and technology categories — will progress through 2026 and into 2027.
For Thames Water specifically, the situation remains more complex. The CMA process was not relevant to Thames Water, which accepted Ofwat's determination. But Thames Water's financial restructuring — separate from PR24 — continues to require careful monitoring by supply chain companies. Payment terms, credit risk and delivery certainty on Thames Water programmes warrant ongoing attention.
The best indicator of where procurement activity is heading is the pipeline notice register on Find a Tender. Under the Procurement Act 2023, contracting authorities must publish pipeline notices for contracts over £2m. Water Industry Hub tracks every pipeline notice issued by UK water companies — subscribe to receive them direct to your inbox.
Water Industry Hub monitors all 17 UK water operators for framework appointments, live tenders, contract awards and pipeline notices — with named supplier detail, supply chain analysis and retender window estimates.
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Published 2 July 2026 · Water Industry Hub · Carl Flello · info@waterindustryhub.com