UK water regulator launches £25 million lab to cut water use

England and Wales are set to see a new wave of water-saving technologies as Ofwat prepares to launch a £25 million Water Efficiency Lab, a challenge-led competition designed to spur innovations that help households and businesses cut consumption. The first round, opened on 25 November, made £5 million available for projects that provide customers with clear, data-driven insights into their daily use—an area regulators say remains a major obstacle to efficiency efforts and one that increasingly influences broader water-resource planning, including agricultural supply.

Demand for water is at record levels, and England faces a projected shortfall of 5 billion liters a day by 2055 due to population growth, climate change and rising consumption. The tightening balance between supply and demand has implications not only for domestic users but also for irrigated agriculture and food production. Yet 94% of people underestimate their own water use, according to industry research, with many believing they consume less than 20 liters a day; actual average use is 152 liters per person. The Water Efficiency Lab will focus its first year on closing this information gap, backing tools that give customers a detailed view of where water is used and how much can be saved.

The scheme, part of Ofwat’s £100 million Water Efficiency Fund, will support solutions ranging from smart data platforms offering real-time feedback to fixture-level monitoring systems and combined consumption-and-leak-detection technologies. Entries aimed at hard-to-meter properties will also be encouraged to ensure wider applicability across the housing stock.

Water Minister Emma Hardy said the initiative comes at a critical time, following a year of prolonged dry weather and growing pressure on national supplies. She said helping households understand their usage is essential, alongside infrastructure investment and ongoing efforts to reduce leakage. Ofwat’s interim chief executive, Chris Walters, added that small consumption cuts across millions of users could materially strengthen system resilience.

The competition is open to UK-based innovators, as well as international entrants partnered with a UK lead organization. Water utilities, technology firms, universities, behavioral-science groups and start-ups are eligible to apply. Submissions will be assessed on potential to reduce consumption, feasibility and pathways to adoption. Winners will be announced in June 2026.

The Water Efficiency Lab is being delivered by Challenge Works, along with Arup and Isle Utilities. Further details, including entry criteria and support for applicants, will be published at launch on the program’s official website.