PR24: United Utilities pledges third of total CSO spend

United Utilities has proposed to plough more than £3 billion into addressing the number of combined sewer overflows across its region, which is one-third of the total spending on overflows across the sector.

UU has the highest volume of overflows due to the age of when sewer infrastructure was laid out in industrial towns and cities in the northwest. It has 2,192 of the 14,000 overflows nationally and 54% of its sewer network is combined, compared to an average 33% nationwide.

By 2030, UU pledged to reduce spills from overflows by 60% by spending on 437 of its overflows.

Its work will prioritise overflows that are close to bathing waters, protected sites or shellfish habitats using nature-based solutions and natural flood management schemes where possible

The region has high volume of overflows that need addressing but also higher than the national average deprivation in parts of UU’s area. The company’s plan therefore includes £525 million dedicated to financially supporting billpayers who are struggling, which UU identified as being one in six households.

The company’s total expenditure is proposed at £13.7 billion with bills to jump 14% from £455 to £518 by 2030.

UU’s Totex spend is dominated by environmental programmes, specifically the Water industry national investment programme (WINEP) which the company said it will need to spend £5.7 billion to meet statutory requirements.

At the previous price review, the company’s final determination stipulated a spend of £5.5 billion, including £663 million on the WINEP.

UU currently is geared at 58%, which it said offers flexibility to finance the full plan over the AMP with 65% gearing – based on Ofwat’s weighted average cost of capital assumptions and without assuming any new equity.

The company’s spend breakdown proposes £350 million on novel water resources and protecting existing supplies as well as £1 billion on network resilience and replacing 950km of aging pipes.

Building on work undertaken in the current asset management period (AMP7), UU will continue to utilise direct procurement for customers (DPC) to fund larger projects such as the Haweswater Aqueduct scheme. Across AMP8 and 9 it will spend £613 million through DPC in addition to the aqueduct.

Resilience spending will be £975 million including to separate rainwater from sewers for flooding resilience and £280 million through the advanced WINEP on managing surface water, which was highlighted as a priority by the National Infrastructure Commission (NIC) as a significant threat to be managed.

Louise Beardmore, chief executive said: “This historic investment will deliver a significant boost to the economy of the North West, supporting 30,000 jobs, of which 7,000 are new roles. We will also double our support for those struggling to pay their bills, with more than half a billion pounds of extra help – enabling us to support more than one in six households.”

She said the company’s robust balance sheet and low gearing will enable it to deliver its plan.

The company’s proposed performance commitments include:

• Lowering leakage by a further 13% on the path to halving leaks by 2050;
• Reducing spills by 26.8% over the five years and working towards no more than 10 per overflow by 2050;
• Removing another 21% of phosphorous from waterways, which exceeds permit requirements;
• Cutting per capita consumption by 4.5%;
• To achieve top five positions for customer, developer and business retail customer experience satisfaction measures;
• To remove 30,000 lead pipes from customer homes; and,
• To roll out 900,000 smart water meters.