The Water Breakthrough Challenge is the second competition funded through the Ofwat Innovation Fund. Entries to the first round have now closed.
The Breakthrough Challenge provides an opportunity for water companies, in partnership with other organisations, to receive funding for innovative initiatives that go beyond business as usual to deliver tangible benefits for customers, society and the environment.
The Challenge aims to spark ambitious innovation and enable new approaches and ways of working; equipping the water sector to address the big challenges facing the sector, driving far-reaching and long-lasting benefits to customers, society and the environment across England and Wales now and into the future.
Individual entries to the Breakthrough Challenge could bid for between £1 million to £10 million from the Innovation Fund.
The below information was provided to entrants during the entry period for the first round of the Water Breakthrough Challenge:
Stage 1 of the Breakthrough Challenge opened on 6 May 2021 at 9 am (BST) and closed on 3 June 2021 at 12 noon (BST).
Following the closing date on 3 June, Stage 1 entries were screened for eligibility and assessed, and a diverse portfolio of entries that best met the relevant assessment criteria were invited to submit a Stage 2 entry from 28 June 2021. The Stage 2 entry period was open for 5 weeks, closing on 30 July 2021 at noon (BST).
Stage 2 entries will be assessed. A diverse portfolio of entries that best meet the relevant assessment criteria will be shared with the judging panel for its review. The judging panel will convene in September 2021. The panel will recommend to Ofwat a diverse portfolio of entries for funding that they consider best meet the relevant assessment criteria and have the potential to deliver tangible positive benefits for customers, society, and the environment. Ofwat will make the final decision on whether to award funding.
If you are successful in winning funding, you can expect to be notified by the end of September 2021.
There is up to £40 million available in total for successful entries in this first round of the Breakthrough Challenge. Individual entries to the Breakthrough Challenge can bid for funding between £1 million and £10 million.
In exceptional circumstances, we are open to considering smaller value bids from small water companies (including NAVs). Please contact us ahead of entering to explore this option further if you think this may be relevant to your organisation. The intent of this facility is to enable water companies who would otherwise not be able to participate to take part in the Breakthrough Challenge.
Areas for innovation
We are looking for your ideas that address the big challenges facing the water sector – guided by our five strategic innovation themes (below). We aim to fund a wide range of entries that will showcase a diverse mix of innovative ways of working and solutions.
Our five strategic innovation themes are:
We have identified a number of innovation enablers that will be particularly critical to growing and sustaining the water sector’s capacity to innovate. The Fund will consider supporting initiatives that demonstrate and further strengthen these enablers, including:
Characteristics of entries
Entry Delivery Timelines
We are open to a wide range of project delivery timelines, from delivery periods of less than a year to multi-year periods which continue beyond 2025. There is no requirement for project delivery to be completed within the current asset management plan (AMP) period.
We expect entries to the Breakthrough Challenge that are awarded funding to start within 6 months of being notified of the award, but we recognise that especially complex entries may require a longer mobilisation period.
Approach to Risk
We are seeking truly innovative entries and we recognise that some initiatives will not deliver the expected direct benefits, but by taking risks and sharing all learning (both positive and negative) customers will stand to benefit.
We want to see companies adopt an open risk appetite, but one which is supported by strong risk management, which includes the ability to recognise and respond appropriately to issues as they arise. This may include taking decisions about how to adjust delivery if the initial benefits can no longer be realised or adopting an approach of ‘early failure’.
We also want to see companies seizing opportunities throughout the delivery of the entry. We will therefore be looking for entries that demonstrate they are thinking widely about benefits, including how learning and insights generated through delivery can be shared in a way that they provide value more widely across the sector, for example, why an initiative has not been successful in achieving its initial intended outcomes.
Within the stage 2 entry form, 3.5.1, entrants are asked to complete a risk register which will demonstrate how risk is being adopted, considered, and managed.
To support this approach to risk, in Question 3.3.1. and 3.3.2, we expect entrants to include clear and meaningful delivery milestones, which take into account dependencies, risks, and opportunities to extract benefits, and key decision points. This could include plans for:
Entrants will be responsible for managing delivery against milestones and adapting delivery to realise the intended impact most efficiently and effectively, with the support of Ofwat and the Breakthrough Challenge delivery partners.
Ofwat and the Breakthrough Challenge delivery partners will monitor the progress of successful entries, and this will include seeking updates at delivery milestones. The monitoring and involvement of Ofwat, Nesta and Arup will be proportionate to the size and risk of entries; in all cases, we will expect winning entrants to be responsible for reviewing progress and deciding the best course of action for their entry to deliver its intended impact, and to share significant learning and decisions with us.
In exceptional circumstances, Ofwat and the Breakthrough Challenge delivery partners may intervene where we have serious concerns that an entry is moving materially away from delivering on its intended impact, or there is any concern about misuse of funds.
Entry Value and Delivery Costs
Entrants should bid for between £1 million and £10 million in funding for this round of the Breakthrough Challenge unless an exception has been agreed together with Ofwat as outlined in 2.3 What you can win.
We expect entries to demonstrate cost efficiency and good use of customer money, with a clear case for any costs included in the entry budget.
Reasonable entry delivery costs are eligible to be funded, including dedicated staff time and fair associated overheads. The entry budget, set out in Questions D and 3.4.1, should be inclusive of any applicable tax where relevant.
Partnerships
We particularly encourage entries that involve partnerships and collaboration between water companies, including NAVs, as well as with organisations in the water sector supply chain and beyond.
Eligibility
There are 3 main categories of eligibility criteria to the Water Breakthrough Challenge, detailed below:
Lead entrant
The lead entrant to the Water Breakthrough Challenge must be one of the 17 licensed regional water only and water and wastewater companies or new entrant water and wastewater companies (NAVs) in England and Wales. We strongly encourage lead entrants to enter the Challenge in partnership or consortia.
For this round of the Water Breakthrough Challenge, we are restricting direct access to water companies. We have committed to keeping eligibility under review and will continue to assess the risks and benefits of broadening out eligibility in future rounds.
Financial requirements
We expect entry partners to make a minimum 10% financial contribution to Breakthrough Challenge entries. Customers should not bear all the risk of initiatives funded through the competition; this is also to ensure strong project management.
The Breakthrough Challenge will cover up to 90% of each entry’s total costs. Entry partners have the flexibility to decide how the remaining 10% is funded, as long as it is not funded by charges to water customers in England and Wales. There is no requirement for it to be shared equally. Entry partners may also consider how they could bring funding from other sources.
Water company contributions will be monitored through the application and monitoring process and Ofwat’s Regulatory Accounting Guidelines tables – Table 9A, column 7. In the entry form, in Question G and 3.1.2., entrants need to specify the source of funds for their contributions. We welcome any additional financial and/or non-financial contributions beyond the minimum 10%, which will be considered favourably during the assessment of entries.
We are open to initiatives that have successfully secured additional external public or private funding.
Entrants, however, must confirm that there is no duplicative or double funding and that they are not restricted by their current funding source when applying for additional and alternative funding through this Fund.
Intellectual property rights (IPR)
In order to receive funding from the Breakthrough Challenge, you will need to agree to the IPR conditions within the terms and conditions. The terms and conditions set out the default position on IPR and also provide opportunity for entrants to propose alternative IPR arrangements Question Q.
In setting out alternative IPR arrangements, you must be able to meet the following conditions:
Ofwat will consider on a case-by-case basis whether these conditions have been met.
To understand how the default position IPR rules may apply in practice, you can read our blog, created in relation to the Innovation in Water Challenge (IWC). The policy and rationale for the IPR conditions on this Challenge remain the same as the IWC.
The entry process
Winning entries will be selected following a two-stage entry process. The two-stage entry process aims to ensure that entrants can develop proposals that have the greatest chance of being awarded funding.
We have worked to ensure the entry process is as efficient and practical as possible, ensuring ease of access for organisations, in particular smaller companies.
The steps of the entry process, detailed below, are:
A. Stage 1 screening entry period
B. Eligibility screen
C. Stage 1 assessment
D. Stage 2 full entry period
E. Stage 2 Assessment
F. Judging
G. Ofwat Decision
H. Award
A. Stage 1 screening entry period
We opened for stage 1 entries on Thursday 6 May 2021, 09:00 (BST) and closed it on Thursday 3 June at 12 noon (BST).
We set out in 5.2.2 Stage 1 assessed questions and assessment criteria the questions that should be answered, together with guidance on how to complete stage 1 of the entry process. At stage 1 we are looking for a high-level narrative summary in response to each of these questions.
All entries must be submitted by 3 June at 12 noon (BST) using the stage 1 online entry form available via the website. The lead entrant will need to submit this form.
Before submitting your entry, please ensure that:
The entry form for both stages is available here as a Word document to help you to develop and collaborate on your answers ahead of completing the online form.
Information you provide in your entry may be shared with our partners (including our judges and any due diligence providers) for the purpose of administering the Challenge. For more information on how we use your data, please have a look at our privacy policy and the terms and conditions of the Challenge.
B. Eligibility screen
Entrants are required to meet the eligibility criteria as set out in 3.1 Eligibility in the Entrant Handbook.
When entries close, an eligibility screen will be conducted to ensure entries all meet the eligibility criteria. If you have proposed alternate IPR arrangements in Question Q, we may be in touch to discuss these with you.
Stage 1 assessment
During Stage 1 an assessment of the entry on the following three categories will be carried out:
Assessors will score answers to these entry questions against set criteria. Scoring will be between 1 and 5 (5 being the highest). These scores are then weighted. The criteria, questions and weighting is set out in 5.2.2 Stage 1 Assessed questions and assessment criteria.
Once the entries have been scored, a moderation meeting will be held. This meeting will ensure that scoring has been consistent and that a diverse portfolio of entries is put forward to stage 2.
Please note that these scores are used to review the entries submitted but will not be the only factor that enables an entry to pass through from one stage to the next, or for the judges to recommend the entry to Ofwat for funding. We will also ensure that we progress a diverse portfolio of entries, in terms of entry themes, types, entrants and geographic location.
Feedback will be provided to entrants who are not invited to submit stage 2 entries providing high-level information about why their entry has not been successful.
C. Stage 2 full entry period
We will open the second stage to invited entries on Monday 28 June 2021 at 09:00 (BST) and will close for entries on Friday 30 July at 12 noon (BST).
We set out in 5.2.3 Stage 2 assessed questions and assessment criteria in the Entrant Handbook the questions that should be answered, together with guidance on how to complete the questions.
The entry will be submitted via the online entry form as before. At stage 2 we will be looking for a fuller, evidenced and referenced narrative, as well as the completion of our entry costs and delivery plan template. Entrants will be able to update their stage 1 answers if they wish. At stage 2 we will also invite you to a video call where a four-minute pitch from your entry team will be recorded. This will not be scored but will be used the aid the understanding of our judges and assessors when scoring your entry.
The entry form for both stages is available here as a Word document to help you to develop and collaborate on your answers ahead of completing the online form.
Information you provide in your entry may be shared with our partners (including our judges, and any due diligence providers) for the purpose of administering the Breakthrough Challenge. For more information on how we use your data, please have a look at our privacy policy and the terms and conditions of the Challenge.
D. Stage 2 Assessment
The stage 2 full entry process will consist of a more detailed assessment of proposals against each of the three assessment categories:
Assessors will score answers to all entry questions against set criteria. Scoring will be between 1 and 5 (5 being the highest). These scores are then weighted. The criteria, questions and weighting are set out in 5.2.3 Stage 2 assessed questions and assessment criteria in the Entrant Handbook. Please note that both stage 1 and stage 2 questions will be considered in assessing entries.
Once the entries have been scored, a moderation meeting will be held. This meeting will ensure that scoring has been consistent and that a diverse portfolio of entries is put forward to the judges.
E. Judging
An independent panel of judges will review the entries put forward through stage 2 assessment. They will review the entries individually, scoring the entries using the same weighting as stage 2 assessment, and then convene as a judging panel to discuss entries and recommend to Ofwat a diverse portfolio of entries that they agree best meet the assessment criteria.
F. Ofwat Decision
Ofwat will make the final decision on which entries are successful and therefore receive funding.
Ofwat intends to publish this decision and its reasons for awarding funding. Ofwat will take account of entrants’ preferences in relation to the confidentiality of their entries.
G. Award
Entries should expect to be notified if they have been successful in being awarded funding by the end of September 2021.
In this category, we will be looking to understand the benefits entries seek to deliver to customers, society, and the environment.
Strong entries to the Breakthrough Challenge will be seeking to address a well-evidenced, important need or opportunity for water customers, society and/or the environment that aligns with one or more of Ofwat’s five strategic innovation themes.
The assessment criteria within this category are:
1.1 Address a significant need or opportunity for customers, society and/or the environment
1.2 Align with one (or more) of Ofwat’s five strategic innovation themes
1.3 Will, or could, be effective in addressing these problems or opportunities
1.4 Set out the range of possible outcomes for the entry, and the most significant inherent risks and uncertainties that will influence which outcomes are realised
1.5 Balance the potential benefits against the most significant inherent risks
In this category, we will be looking to understand what is novel about the proposed approach and solution, and how it could deliver a positive sector-wide innovation legacy.
Strong entries will demonstrate how the proposed entry goes beyond the entrant’s business-as-usual approach to innovation. This is both in terms of what the entrant proposes to deliver and how they propose to deliver it
The assessment criteria within this category are:
2.1 Use innovative approaches and/or solutions which would not be funded as part of business as usual
2.2 Develop innovation enablers which accelerate practice beyond business as usual
2.3 Set out plans for adoption at scale across the water sector
In this category, we will be looking for strong evidence that the proposed project is feasible for the entrant and that appropriate resources and governance will be in place for its delivery.
The assessment criteria within this category are:
3.1 Show commitment to the entry
3.2 Will be delivered by a team with the relevant skills and experience
3.3 Set out a realistic and achievable programme
3.4 Demonstrate a realistic and considered costing which makes good use of customer funds
3.5 Demonstrate a clear and proportionate approach to addressable risk
We strongly encourage all entrants to read the Entrant Handbook along with the full terms and conditions, which are the rules entrants are required to agree to in order to take part before entering the Breakthrough Challenge. We have added downloadable versions of the key entrant materials in the following section.
Before submitting your entry, please ensure that:
The entry form for both stages is also available here as a Word document to help you to develop and collaborate on your answers ahead of completing the online form.
Information you provide in your entry may be shared with our partners (including our judges and any due diligence providers) for the purpose of administering the Challenge. For more information on how we use your data, please have a look at our privacy policy and the terms and conditions of the Challenge.
Entrant Handbook (PDF, 2 MB)
Entry form editable draft (stage 1) (Docx, 449 KB)
Entry form editable draft (stage 2) (Docx, 445 KB)
Please note the editable forms above are for drafting purposes only. You must ensure you enter all the final details on the online form available on the entry platform.
If you need support in completing your entry, please sign up for a one-to-one surgery session, which you can register for via Eventbrite.
We are committed to enabling a diverse range of entrants to enter the Challenge. If there are any reasonable adjustments that would support you to enter, catering for any additional needs you may have, please contact [email protected].
