Frequently Asked Questions

Find answers to commonly asked questions.

1. The Water Breakthrough Challenge (“Breakthrough Challenge”)

Ofwat set up the Innovation Fund to help the England and Wales water sector to grow its capacity to innovate and enable it to better meet the evolving needs of customers, society and the environment. We expect the Fund to run to 2025, but our goal is that its impact will continue well beyond this. 

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

Ofwat has selected Nesta Challenges, supported by Arup, as delivery partner for the Breakthrough Challenge. 

Ofwat set up and oversees the Innovation Fund, working closely with its delivery partner.  

Nesta is an innovation foundation.  

Arup is an independent professional services firm of designers, planners, engineers, architects, consultants and technical specialists. 

In comparison to the Innovation in Water Challenge, through the Water Breakthrough Challenge we are looking for larger-scale 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; and 
  • a more in-depth, two-stage entry process, which aims to ensure entrants can develop proposals that have the greatest chance of being awarded funding.

We are continuing to listen and learn as we develop the water innovation challenges, and we expect the design of the competitions to evolve further as we learn from previous rounds. 

2. Water Breakthrough Challenge timelines

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 1 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: 

  1. Capacity, capability and commitment to deliver

See assessment criteria for more information. 

The entries which best meet the assessment criteria and get shortlisted 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 to progress to the next stage. 

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. However, we recognise that especially complex projects may require a longer mobilisation period. 

The first round will open from 6 May 2021, with successful entries expected to be informed by September 2021. The second round is expected to launch in late 2021 or early 2022. We expect future rounds to continue until 2025. 

Please note, future rounds may be designed differently. We encourage you to see the Breakthrough Challenge, and future competitions, as an opportunity to explore the possibility of working in partnership with water companies and other organisations. 

3. Who can enter

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 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. 

For this round of the Water Breakthrough Challenge, we are restricting direct access to water companies, including NAVs, because the innovation fund is funded by water customers. 

We have committed to keeping the eligibility of the fund under review during the pilot period (running until March 2022) and will draw evidence from each round of the competition to inform any change in our current position. 

As a water retailer, you are able to enter the first round of the Breakthrough Challenge as part of a partnership or consortia led by one of  17 licensed regional water and wastewater companies or new entrant water and wastewater companies (NAVs) in England and Wales 

We have committed to keeping the eligibility of the fund under review during the pilot period (running until March 2022) and will draw evidence from each round of the competition to inform any change in our current position.  

Partnerships should be in place for as long as is required for successful delivery of the initiative. Successful entries will provide evidence to the judges to demonstrate the strength of collaboration arrangements through the entirety of the initiative or project life cycle.  

We recognise that it takes time to forge good relationships, so we’d encourage you to plan early and also 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 project ideas. 

We expect water companies to improve their accessibility for potential partner organisations.  

Water companies have published guidance of the key challenge areas where they are actively seeking new innovations, available on the Water2050 Website 

If 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 encourage you to reach out to water companies not only in relation to ideas and projects you are considering for the first round of the Breakthrough Challenge launching in May 2021, but also in preparation for future competitions (both future Water Breakthrough Challenge rounds and the Innovation in Water Challenge).  

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. 

It’s also worth keeping an eye out for activities and events we will be arranging to help facilitate partnership development. 

There will be activities and partnership development events organised and more details of these will follow shortly. However, we encourage you to be proactive in seeking other partnership opportunities early on. 

Organisations that have already worked together are welcome to enter. However, we strongly encourage the formation of new partnerships that bring additional value to individual entries 

We have not set out a preferred make up of partnership / consortia as we do not want to restrict any opportunities at this stage. Entries will be assessed against the assessment criteria. 

4. Your project or initiative for entry

We are seeking truly innovative entries that go beyond business as usual to deliver tangible benefits for customers, society and the environment. 

See assessment criteria for more information. 

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.  

Yes, if an entry is unsuccessful then it can be resubmitted to a later competition, having considered any feedback given.  

We will aim to provide clear feedback to support further development of unsuccessful entries. The same entry should not be resubmitted until relevant feedback has been considered.  

We are also open to winners using later competition rounds to further the development of a previously successful entry – subject to evidence and assurance that there is no double funding.

Yes. 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.

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

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.  

Across all the rounds of competitions, we are aware that some entries may be completed after 2025.

5. Entering the Water Breakthrough Challenge

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.  

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. 

As a guide, we would not expect it to take you more than two days to complete the first stage entry form. 

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. 

6. Water Breakthrough Challenge assessment criteria

We are hoping to receive a wide range of entries that will showcase a diverse mix of innovative ways of working and solutions across our 5 strategic themes for the competitionWe 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. 

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

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. 

7. Costs & Funding

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. 

The lead water company will receive the funds for awarded projects. 

The lead water company will receive the funds. It is a contractual matter between members of a partnership how the funds will then be split and allocated between different parties within the partnership. This also applies where there is a consortia of water companies.  

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.  

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. 

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 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. 

Where the financial contribution is from water companies (including NAVs)Ofwat sets the WACC to fund returns to equity and debt and it is through these returns that we expect water companies to make their contribution.  

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. 

If you want to understand the reasoning behind our IPR position you can read our August 2020 decision document on the Innovation Fund.