We consulted on our draft themes in our May 2020 consultation. We received over 50 responses to this consultation, following which we made some adjustments to the draft themes. Details on the consultation responses and our final themes can be found on the Ofwat website.
The Innovation Fund is funded by water and wastewater customers in England and Wales.
The five strategic innovation themes set out the big challenges facing the sector, which would benefit from additional innovation.
Through the competitions, the Innovation Fund will support initiatives that can deliver significant value for customers, society and the environment aligned with one or more of these themes. We consulted on these themes in May 2020 and made changes as a result – please see details of the consultation here. Our final strategic themes were published in our policy decision document in August 2020.
The Innovation Fund is currently in a pilot period, running until March 2022. It is expected that future rounds of competitions will continue until 2025 and we are continuing to listen and learn as we deliver competitions. We will provide more information on these rounds, including dates, closer to the end of the pilot period.
One of the priorities for Ofwat’s Innovation Fund is enabling the water sector to better meet the evolving needs of its customers. This is focused on household customers in England and Wales, although benefits to non-household customers are also encouraged. All entries that propose primarily to benefit non-household customers must also demonstrate how the proposal can also provide benefits to household customers. More guidance is available on Ofwat’s website.
Entries should clearly explain how the proposed innovation will make a difference for customers – for example, by lowering costs, giving them insights to help them plan their water use, or by improving their experience of their local water environments.
Breakthrough 2 combines elements of the Innovation in Water Challenge (IWC) and the first round of the Water Breakthrough Challenge (‘Breakthrough 1’) to provide a unified and streamlined process for water companies and their partners to access the Fund.
The two streams of Breakthrough 2 have slightly different key dates, as the Transform stream has a two-stage entry process:
Entries open: 9am (BST) on 11 October 2021
Entries close: 12 noon (GMT) on 8 December 2021
Judging panel meeting: mid-February 2022
Winners announced: By mid-March 2022
Stage 1 entries open: 9am (BST) on 11 October 2021
Stage 1 entries close: 12 noon (GMT) on 16 November 2021
Stage 2 entries open: 9am (GMT) on 15 December 2021
Stage 2 entries close: 12 noon (GMT) on 8 February 2022
Judging Panel Meeting: March 2022
Winners announced: By late-April 2022
The lead entrant must be one of the licensed water companies or NAVs in England or 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:
We are exploring ways to create more opportunities for innovators and other stakeholders within and outside the water sector in future competitions. For Breakthrough 2 water companies, including NAVS, are required to be the lead entrant. However innovators and other stakeholders, in partnership with the lead entrant, can develop the entry and if successful will then have access to the funding via the lead entrant.
Entries open: 9am (BST) on 11 October 2021
Entries close: 12 noon (GMT) on 8 December 2021
Judging panel meeting: mid-February 2022
Winners announced: By mid-March 2022
Stage 1 entries open: 9am (BST) on 11 October 2021
Stage 1 entries close: 12 noon (GMT) on 16 November 2021
Stage 2 entries open: 9am (GMT) on 15 December 2021
Stage 2 entries close: 12 noon (GMT) on 8 February 2022
Judging Panel Meeting: March 2022
Winners announced: By late-April 2022
As a water retailer, you are able to enter Breakthrough 2 as part of a partnership or consortia led by a registered water company (or NAV) in England and Wales.
We have committed to keeping eligibility under review and are exploring ways to create more opportunities for innovators and other stakeholders within and outside the water sector in future competitions.
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 entry ideas.
Please review our ‘Find a partner’ page for up to date information on working with the water sector.
To help build new connections in the water sector, we have launched our Water Innovation Directory, which hosts pitch videos from innovative suppliers interested in working with water companies to address the sector’s biggest challenges. You can view pitches, or register your interest in being featured on the Water Innovation Directory.
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.
You can read the full assessment categories and guidance for each stream of Breakthrough 2 on their dedicated pages:
The lead entrant (a water company or a NAV) will receive the funds. Both the lead entrant and all partners must agree to and will
It is then a contractual matter between members of a partnership to make their own arrangements on how the funds and responsibilities will be split and allocated between different parties within the partnership. This also applies where there is a consortium of water companies.
Both streams of Breakthrough 2 are looking for your ideas that address the big challenges facing the water sector – guided by Ofwat’s five strategic innovation themes. We aim to fund a wide range of entries that will showcase a diverse mix of innovative ways of working and solutions.
See sections 4 and 5 of the Entrant Handbooks for the Catalyst and Transform streams for more details on what we are looking for and the assessment criteria for both streams.
We are seeking truly innovative entries that go beyond business as usual to deliver tangible benefits for customers, society and the environment.
The same entry may be submitted to future rounds, provided it can comply with the criteria for that round.
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 continued compliance with the criteria for that round including evidence and assurance that there is no double funding.
We have committed to keeping eligibility under review and are exploring ways to create more opportunities for innovators and other stakeholders within and outside the water sector in future competitions.
Yes. We are seeking truly innovative entries and recognise that these present both risks and opportunities.
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 2 delivery partners.
We are open to a wide range of initiative delivery timelines, from delivery periods of less than a year to multi-year periods which continue beyond 2025. There is no requirement for delivery to be completed within the current asset management plan (AMP) period.
We expect initiatives entered into Breakthrough 2 to start within six months of being awarded funding; however we recognise that entries will vary in duration beyond the start date.
Location of work will be up to those submitting the entry.
A summary of what you are required to submit to enter Breakthrough 2 is provided on the ‘Get involved and enter’ page.
We are committed to enabling a diverse range of entrants to enter Breakthrough 2. If there are any reasonable adjustments that would support you to enter, catering for any additional needs you may have, please contact [email protected].
You can submit as many entries into the challenge as you like, providing each entry is for a different initiative. We will ensure that we progress a diverse portfolio of entries in terms of entry themes, types, entrants and geographic location.
You will be asked to indicate in your entry the parts which are confidential. Entries, including confidential information will be shared with those involved in running and assessing entries, including our delivery partners, assessors and the judging panel in confidence. Details of entries will be considered as part of our ongoing evaluation activities and may form evidence for future policy developments.
Ofwat may include non-confidential information about your entry in decision documents and other publications.
Please refer to the full terms and conditions for Breakthrough 2 for more information.
Approximately £5 million is available in the Catalyst stream of Breakthrough 2, for individual entries seeking funding of between £100,000 and £1 million.
Approximately £34 million is available in the Transform stream of Breakthrough 2 for individual entries seeking funding of between £1 million and £10 million.
The lead water company will receive the funds for winning entries.
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, the judging panels and Ofwat that entrants have a realistic cost breakdown and financial plan, with cost risks and associated contingency arrangements identified.
We are open to initiatives which have successfully secured additional external public or private funding. But entrants must confirm that:
Funds from this competition are not classified as State Aid.
Only 90% of each entry’s financial costs will be provided by funding from Breakthrough 2. The remaining 10% must be provided by entry partners as a mandatory 10% financial contribution. 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.
Additional financial and in-kind contributions can be made on top of the maximum amount available from the Fund.
Following confirmation from HMRC, receipt of funds through the competition is not subject to VAT.
Activities undertaken within entry projects are subject to VAT and are subject to the usual rules of recoverability for water companies.
Entry delivery costs should be inclusive of applicable taxes which are not recoverable, reflecting the true costs of the initiative.
Entrants to the Catalyst stream will have two IPR options to choose from:
Please see section 2.3 in the Catalyst Stream entrant handbook for full details on the two IPR options available. In deciding which is the best option for your project, we encourage entrants to consider the extent to which the use of background IPR is core to realising the benefits of foreground IPR developed during their entry.
In respect of all options available, you will be required to answer questions on your IPR proposals. We may seek further clarification on these proposals following the submission of your entry.
For the Catalyst stream, of the approximately £5 million available, our current intention is to make approximately £2.5 million available to bid for under both options 1 and 2.
In order to assess whether the proposed terms are fair, reasonable and non-discriminatory we expect you to provide information in your entry that demonstrates how the proposed royalties, remuneration and/or principles are:
