About the Water Breakthrough Challenge

The Water Breakthrough Challenge is the second competition funded through the Ofwat Innovation Fund 

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. 

Individual entries to the Breakthrough Challenge can bid for between £1 million to £10 million from the Innovation Fund. We are open to considering smaller value bids from small water companies (including NAVs) – please contact us to explore this option further if this would be relevant for you.

We’ve pulled together the key information you will need to enter, including:

Round one timeline

Funding for the Breakthrough Challenge will be awarded following a two-stage competitive process. The two-stage entry process aims to ensure that entrants can develop proposals that have the greatest chance of being awarded funding.

Stage 1 Screening 

We will open the first stage for entries on Thursday 6 May 2021, 09:00 (GMT) and close it on Thursday 3 June at 12 noon (GMT).

The Stage Screening assessment will consider how well entries meet the first two categories of our assessment criteria:

1. Positive impact for water customers, society and the environment

2. Innovation enablers and innovative solutions

We will ask entrants to provide clear descriptions of how their proposals will meet the core elements of these assessment criteria. Entries will not be required to provide detailed evidence at this stage.

In Stage 1 we will also be seeking high level information on our third criteria, including in relation to total project costs and partnership arrangements:

3. Capacity, capability and commitment to deliver

See the section on Assessment Information for more information.

The entries which best meet the assessment criteria during the Stage 1 Screening will be invited to develop into Stage 2 Full Entries.

Feedback will be provided to entrants who are not invited to submit Full Entries as to why their entry has not been successful.

Stage 2 Full Entry

We will open the second stage to invited entries on Monday 28 June 2021 at 9:00 (GMT) and close it on Friday 30 July at 12 noon (GMT). 

Stage 2 Full Entry process will consist of a more detailed assessment of proposals against each of the three broad assessment categories. Click on any category to view more details: 

  1. Positive impact for water customers, society and the environment 
  2. Innovation enablers and innovative solutions 
  3. Capacity, capability and commitment to deliver 

In Stage 2, we will be looking for entrants to provide a greater level of detailed justification and evidence to support their application for funding.

Entries which best meet the assessment criteria will be reviewed by an independent judging panel who will recommend which projects should receive funding. Ofwat will make the final decision.  

If you are successful in winning funding, you should expect to find out by the end of September 2021. 

We will expect entries to the Breakthrough Challenge that are awarded funding to start within 6 months of us notifying them of the award, but wrecognise that especially complex projects may require a longer mobilisation period.

What you can win

Individual entries to the Water Breakthrough Challenge can bid for funding between £1 million and £10 million.  

We are open to considering smaller value bids from small water companies (including NAVs) – please contact us to explore this option further if this would be relevant for you.  

The judges will consider how best to allocate the £40 million funding based on the entries received, to develop a diverse portfolio of funded projects, with Ofwat making the final decision.

What we are looking for

Details about Entries  

We are seeking truly innovative entries and recognise that these present both risks and opportunities.  

To help manage these, entrants will be expected to consider realistic, meaningful project milestones which will be referred to in determining:   

  • monitoring for winning entries;  
  • delivery milestones associated with drawdown of funds; and / or 
  • milestones to consider scope changes to enable the intended impact to be realised  

We will provide more detail and examples in the entrant materials available at launch on 6 May 2021.

Assessment information 

Entries to the Water Breakthrough Challenge will be assessed by assessors and the judging panel against criteria grouped into the following three broad categories:  

  1. Positive impact for water customers, society, and the environment 
  2. Innovation enablers and innovative solutions 
  3. Capacity, capability and commitment to deliver 

We will publish the detailed assessment criteria within these categories and guidance for assessors and the judging panel at the beginning of the Stage 1 entry period on 6 May 2021.

We have set out below: 

  • our expectations for what successful entries to the Challenge will need to evidence;
  • key considerations that the assessors and judging panel will take into account in assessing entries to the Challenge.

1. Positive impact for water customers, society and the environment

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.

Entries will be expected to provide robust evidence that they can deliver significant – and even game-changing – benefits to customers, society and/or the environment. The inherent risks to realisation of the project benefits will be clearly articulated.

Strong entries will have a clear plan for delivering benefits beyond the specific project for which funding is soughtfor example through having credible plans to generate and share learning and insight across the sector to support and inform future opportunities in an open and accessible way, utilising open data approaches where possible.

Important considerations for assessors and the judging panel will include the following:

  • Does the entry represent a compelling use of customer money, taking into consideration both the potential benefits and the risks?
  • How will the entry prepare the company or the wider sector for challenges in the future e.g. ability to be more flexible, adaptable, responsive and efficient in addressing future challenges (guided by Ofwat’s five strategic innovation themes)?
  • What is/are the longer term or strategic goal(s) to which the entry will contribute, and how will the entry help the entrant and the wider sector to achieve these?

2. Innovation enablers and innovative solutions

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.

Innovation needs to be engrained in the culture of every company if they are to successfully address the challenges they face individually and as a sector.

Strong entries will demonstrate how the proposed project goes beyond the entrant’s businessasusual approach to innovation. This is both in terms of:

  • what the entrant proposes to deliver;
  • how they propose to deliver it.

Entries will need to set out the benefits that the proposed project could have in developing the entrant’s innovation culture and that of the wider sector.

Entries could include testing new ideas; adapting ideas or practices that have established themselves in other sectors; or adopting proven approaches that haven’t been tried at scale.

We recognise that going beyond business as usual may involve taking on greater or new kinds of risk, and entrants will be invited to set out how these risks will be considered and managed, and how opportunities will be sought, including opportunities to generate and disseminate learning and insight.

Important considerations for assessors and the judging panel will include the following:

  • How and why the proposal is novel and/or untested at the scale and in the circumstances in which it will be deployed?
  • How and why is the entry something the entrant would not otherwise invest in as part of its business as usual? How might the entry influence or change the entrant’s businessasusual approach to innovation?
  • How does the entry facilitate effective joint working to overcome challenges, in particular in the context of rolling out solutions at scale in future?
  • How does it influence the company’s and the sector’s business systems and processes, including ability to make decisions, and greater understanding of innovation risks and opportunities?
  • What does it mean for the skills and resources needed by the entrant company and / or sector going forward, e.g. the way the business uses its people?

3. Capacity, capability and commitment to deliver

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.

Strong entries will demonstrate that they have realistic and achievable delivery plans, and will suggest appropriate milestones for the purpose of monitoring project progress. Entries should demonstrate an understanding of the circumstances in which the project may need to adapt, pivot or even stop if new evidence suggest alternative approaches might be more beneficial. The entry will set out credible plans for managing addressable risks of successful project delivery.

Entries will propose a strong delivery team with the necessary skills and experience to deliver the project to the highest professional standards, with appropriate internal governance. This will include having strong partners for delivery and appropriate partnership arrangements.

Strong entries will reassure assessors and the judging panel that they have a realistic cost breakdown and financial plan, with cost risks and associated contingency arrangements identified.

Important considerations for assessors and the judging panel will include the following:

  • The relevant capabilities and experience of the project team and the wider organisation, and the specific challenges the project is likely to pose to the delivery team.
  • Evidence of commitment from the entrant’s wider organisation to the proposed project.
  • If and how funding is split between project participants to the benefit of the partnership and project.
  • Profile of spend over the life cycle of the project.
  • Consideration of project cost breakdown into component costs.

Who can be involved


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.

We are hoping to receive a wide range of entries that will showcase a diverse mix of innovative ways of working and solutions. In comparison to the Innovation in Water Challenge, we are looking for largerscale projects which can deliver a significant and tangible impact towards one or more needs for customers, society and the environment. This is reflected in the more substantial funding on offer to successful entrants.

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.

Intellectual property rights (IPR)

The policy on IPR for the Breakthrough Challenge remains in line with that set out in the first Innovation in Water Challenge terms and conditions. We will publish detailed IPR terms on 6 May, as part of the Breakthrough Challenge terms and conditions.

The Breakthrough Challenge entry form will ask entrants how they will meet the IPR requirements.

Where entrants request an alternative IPR arrangement, we expect entrants to confirm how any alternative IPR arrangements will have positive impacts for all water customers, society and the environment, including in relation to value for money. We will consider these requests on a case-by-case basis.

To understand how the IPR rules may apply in practice, you can read our blog.

Financial Requirements 

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. Further details will be available on 6 May 2021.

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 project’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.

  • Water company contributions will be monitored through the application and monitoring process and Ofwat’s Regulatory Accounting Guidelines tables – Table 9A, column 7.
  • If entering as part of a group or consortium, it is up to entry partners how they wish to divide this 10% contribution. There is no requirement for it to be shared equally. Entry partners may also consider how they could bring funding from other sources.

In the entry form we will require the entrants 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 projects which have been successful in other funds and already have additional funding. For example:

  • organisational investment
  • public or private funding

However, entrants must confirm that there is no duplicative or double funding.

The entrant(s) will also need to confirm that they are not restricted by their current funding source when applying for additional and alternative funding through this Fund.


We encourage both water companies and third parties to actively establish new partnerships to enter the Challenge. Partners of water companies do not need to be based in England and Wales.

Water companies can enter in partnership with organisations within and outside the water sector. For example:

  • academia
  • water retailers
  • start-ups
  • small businesses 
  • across sectors such as energy, manufacturing, health or financial services.

Further information to facilitate partnership building will be available soon, including any networking and brokerage events to support networking and collaboration.

  • If you are a water company We strongly encourage you to explore opportunities for new partnerships and consortia, including by signalling opportunities for partnerships on your website and social media channels.  You can partner with anyone you wish. However, please note that it’s your responsibility to carry out any checks and due diligence on partners. 
  • If you are not a water company – We encourage you to see the Breakthrough Challenge, and future competitions, as an opportunity to explore the possibility of working in partnership with one or more water companiesIf you are new to the water sector, you may wish to email contact@waterinnovation2050.org.uk to get in contact with the 17 licensed regional water only and water and wastewater companies about your innovative idea or solution. This central inbox is managed by an alliance of 19 UK water companies. A full list of England and Wales water companies, including NAVs, that can be contacted to explore new partnership opportunities can be found on the Find a partner page

We recognise that it takes time to forge good relationships, so we encourage you to plan early and have an eye on future competition rounds.

We recommend that you do not wait for a competition to open to start developing relationships to ensure sufficient time is allowed to nurture relationships and hone ideas.

How to enter

We will make the online entry form for Stage 1 available from 09:00 (GMT) on 6 May 2021.

The lead entrant water company, leading any partnership or consortia, will need to complete and submit this form. As a guide, we would not expect it to take you more than two days to complete the first stage entry form.

We will publish the entry form for Stage 2 on 6 May to allow for drafting of entries from the beginning of the entry period.

We are aiming to ensure that the entry process is as efficient and practical as possible. We want to ensure access is easy for all organisations, particularly smaller companies.

More information and support for your entry

Full details about the assessment criteria and entry forms will be published at the beginning of the Stage 1 entry period on 6 May 2021.

We will have a range of support activities for entrants during the entry period, including one-to-one surgery sessions.

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 waterinnovation@nesta.org.uk.