New report examines potential impacts of COVID-19 on water sector

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Ofwat and Water UK have published a report exploring the potential impact COVID-19 might have on the water sector in England and Wales.

In May this year, Ofwat and Water UK decided to collaborate to better understand the potential impacts of COVID-19 across the industry and jointly commissioned a piece of research to look at the scale of these impacts under a range of future scenarios.

Rob Wesley, Head of Policy, Water UK, commented on the report: “COVID-19 has impacted all aspects of water company operations, from frontline key workers doing whatever is needed to keep water flowing and meet exceptional demands for water, to providing additional support to customers in need.

“Although it is too early to say what the full impacts of the pandemic will be and what changes might be needed as a result, this report provides an important shared evidence base for both the industry and Ofwat.”

Frontier Economics, supported by Atkins in the preparation of the report, collected data from water companies in August 2020, covering the period of April-July 2020.

The document highlights the areas that companies reported were most impacted during this period and might be impacted in the future.

However, given the short timeframe for this project, the data that was collected was preliminary.

In light of this, and as there is significant uncertainty about the future path of the pandemic, Ofwat and Water UK recognise the report’s conclusions should be interpreted with some caution.

The report establishes shared evidence on the impacts of the early phase of the pandemic and identifies areas (such as the impact on per capita consumption) that had by July already seen significant change and may be materially affected going forward, and which could benefit from further exploration.

It also finds that companies are likely to be impacted differently depending on their particular circumstances and that there are some opportunities for companies to explore.

Alena Kozakova, Chief Economist at Ofwat, added: “We are pleased to have worked with Water UK, and grateful to Frontier Economics and Atkins for developing this report at pace to help give an initial view of where the areas most impacted by the pandemic are likely to be.

“Water companies responded well to the initial difficulties presented by COVID-19, adapting and even finding new ways to deliver services. We appreciate their work in providing the information that has helped shape this report.”

The ‘Economic impacts of COVID-19 on the water sector’ can be read in full on Ofwat website.