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.
At the end of the Innovation Fund pilot period, we published an additional consultation in April 2022, where we identified a number of key areas where further evolution of the fund would be beneficial over the next three years (2022-25).
We reflected on the feedback we received during the pilot period and proposed revised themes to align more closely to the 2050 water innovation strategy and the updated UK Government Strategic Policy statement. These were received well through the consultation and we announced in July 2022 that these would be the themes for 2022-25.
The Innovation Fund is funded by household water and wastewater customers in England and Wales.
The four strategic innovation themes set out the big challenges facing the sector, which would benefit from additional innovation. These themes have been updated since the second round of the Water Breakthrough Challenge. We no longer explicitly reference open data or vulnerability in the themes – however, both would be implicit in theme 4 (and others), and both would easily be a means to fulfil this theme.
While no longer explicitly referenced in the themes, enabling activities are still very important to drive innovation in the sector and have a key role to play in helping the Fund achieve its outcomes. We invite entries in this important area as they will support the Fund’s ambition to embed innovation practices and knowledge within water companies (and the sector) for the long term.
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, then updated following consultation in July 2022.
We will run three rounds of the Water Breakthrough Challenge up to March 2025. The Water Breakthrough Challenge 3 launched on 3 October 2022. For 2023-24 and 2024-25 we will aim to launch the competition in September of each year and conclude by March of the following year. The first open access competition will open no earlier than January 2023.
We will review the success of this initial competition before making a decision on the frequency of future open access competitions.
We will consider adjusting competition design parameters, including competition scheduling, if this will improve fund outcomes. This may include the introduction of targeted, challenged-based competitions across this period. In the event that this happens, we will provide sufficient notice to stakeholders. We will also bear in mind as we design future competitions the 2024 price review and the impact it will have on the sector.
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 3 has been designed to be consistent with Round 2, with most things being kept the same.
Following the success of the Background IPR trial in Breakthrough 2 Catalyst, the default IPR terms in Breakthrough 3, across both Catalyst and Transform now are the terms in the Background IPR trial, allowing for background IPR to be licenced at a fair, reasonable and non-discriminatory rate and requiring that foreground IPR is shared with water companies in England and Wales. Please see more in the terms and conditions.
We also heard through the consultation that prospective entrants would be keen to have the opportunity to pitch their initiatives live to judges. In Round 3, we will be trialling this across both streams. This also means that pitch recordings will be required for Catalyst for the first time.
The two streams of Breakthrough 3 have slightly different key dates, as the Transform stream has a two-stage entry process:
Entries open: 9am (BST) on 3 October 2022
Entries close: 12 noon (GMT) on 8 December 2022
Judging panel meeting: 8-9 March 2023
Winners announced: Mid April 2023
Stage 1 entries open: 9am (BST) on 3October 2022
Stage 1 entries close: 12 noon (GMT) on 9 November 2022
Stage 2 entries open: 12 noon (GMT) on 8 December 2022
Stage 2 entries close: 12 noon (GMT) on 2 February 2023
Judging Panel Meeting: 19-20 April 2023
Winners announced: Late May 2023
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:
For Breakthrough 3 water companies, including NAVS, are required to be the lead entrant. Other organisations, in partnership with the lead entrant, can develop the entry and if successful will then have access to the funding via the lead entrant.
For the Catalyst Stream, partners other than the lead water company can submit the entry, which will then be shared with the lead entrant for validation.
The new open access competition will be open to organisations other than water companies as the lead entrant.
As a water retailer, you are able to enter Breakthrough 3 as part of a partnership or consortia led by a registered water company (or NAV) in England and Wales.
The new Water Discovery Challenge will be open to organisations other than water companies as the lead entrant.
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.
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 3 on their dedicated pages:
The lead entrant (a water company or a NAV) will receive the funds and is responsible for any relevant legal agreements.
It is 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 3 are looking for your ideas that address the big challenges facing the water sector – guided by Ofwat’s four 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. You should not enter with initiatives that are business-as-usual, but you can enter with initiatives that are part of a larger initiative or project, but the scope of the initiative you are entering should be made very clear. The entry will be assessed on the basis of what will be delivered as part of that scope, rather than the scope of any wider initiatives.
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.
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 3 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 3 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 3 is provided on the ‘Get involved and enter’ page.
We are committed to enabling a diverse range of entrants to enter Breakthrough 3. 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 3 for more information.
If you’re having any problems with Submittable, please contact the team at [email protected] for help. There are self-service help files available direct from Submittable here.
Unfortunately, the export feature in Submittable strips away any rich text formatting, such as bold, italics and bullet points. Submittable are exploring adding exporting rich text formatting in their development roadmap, but please be reassured that Assessors and Judges have access to review your entry directly on Submittable so can see entries with all the formatting that is input when you submit.
There are known issues with using Submittable when using certain firewalls, which block the ability to upload documents to Submittable. At this time, we are aware that this most commonly affects entrants using Submittable while the Dwr Cymru Welsh Water firewall is active.
Where possible, please save your entry and attempt to use a device not using a firewall but if this isn’t possible or practical, please feel free to send any relevant attachments to [email protected] with reference to your entry and we will attach them on your behalf.
We offer one-to-one surgery sessions give entrants an opportunity to ask questions about the entry process. Their aim is to help clarify information available publicly and support in understanding the guidance currently available.
You can sign up to a 15-minute session, and one of the delivery team from Challenge Works, Isle and Arup will aim to answer all your questions on the short call. If we aren’t able to answer your question on the day we will then go away and aim to get back to you as soon as possible with an answer. You are welcome to book as many surgery sessions as you wish, and you are also welcome to bring along multiple team members to the session. All sessions will be carried out using Zoom. If this is a technical issue for you, please email us at [email protected] and we can organise a phone call or to use Microsoft Teams.
The team will not be able to provide any guidance on entries themselves through the surgery sessions.
If you’re successful in Stage 1 of the Transform stream, you will be invited to Stage 2 when it opens on 8 December 2022 at 12 noon.
You will have access to your entry again in Submittable, and the entry form will have been updated to reflect the changes set out in the entrant handbook. You can change answers to all your questions in this period, but we do ask that you keep your entry in the spirit of the one entered into Stage 1.
You will be welcome (but not obliged) to re-record your pitch recording during the entry period.
Once Stage 2 closes on 2 February 2023 at 12 noon (GMT), your entry will be completely re-assessed. This may be by a different assessment team who first reviewed your entry
Pitch recordings are short recordings that are viewed alongside your full entry to help assessors (and later judges in the live pitches) to understand and review your entry.
In this round, we are trialling live pitches to judges for shortlisted entries across both Transform and Catalyst streams.
As part of the entry process, all entries are reviewed by technical assessors who then provide guidance to judges relating to the technical elements of entries. In order to ensure these technical assessors can provide this guidance, your pitches that are recorded as part of your entry should be the same as those you would intend to present live to judges if successful in being shortlisted.
For Catalyst, pitch recordings are now required and should be no longer than 3 minutes in length.
For Transform, we have extended the time limit from 4 minutes to 5 minutes for pitch recordings.
We ask that you do not come to pitch recording sessions with pre-recorded pitches, with the exception of any short (up to 30 seconds) video excerpts.
To promote equity, diversity and inclusion, we will also be trialling excluding speaker video in pitch recordings for Breakthrough 3. We ask that you present slides or other visuals while talking to reduce any potential bias in our entry process.
A pitch recording session is designed to give you a supportive space to record your pitch. By default, these happen on Zoom but let us know if this is a problem for you.
When you join the session, you will be joined by one team member from the delivery team.
You will be invited to test that your sound and screen sharing are all working well. When you’ve tested these out and are ready, we will then invite you to record your pitch. We will offer to give you time prompts (for example, 1 minute remaining) using the chat, or to leave you to it. We will stop the recording when the allotted time (3 minutes for Catalyst, 5 minutes for Transform) is up. Assuming there is time left in the 15-minute recording slot, we will ask you if you are happy or if you wish to have a second attempt at the recording.
If, after the second attempt, you are still not happy, we will offer you an alternative 15 minute slot to try again.
No, there will be no questions and answers to you on the pitch recording session, however there will be as part of the live pitch to judges. More information about this will be shared if you are invited to pitch to judges.
Approximately £8 million is available in the Catalyst stream of Breakthrough 3, for individual entries seeking funding of between £150,000 and £2 million.
Approximately £30 million is available in the Transform stream of Breakthrough 3 for individual entries seeking funding of between £2 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 3. 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.
Where taxes are fully recoverable, such as VAT, costs should be shown net of (excluding) the recoverable amount.
Taxes that are not recoverable should be included, for example, customs duties payable on goods imported into the UK.
Nominal prices are money in today’s value, rather than a deflated or inflated value. For example, water companies often operate in 2017/18 prices in line with the current AMP cycle. The amount you bid for in the Water Breakthrough Challenge is the amount you will receive, if successful, in today’s money.
You are welcome to use your preferred approach to calculating overheads; please provide details of the approach you have used within the template.
Yes, please feel free to change the formatting and overwrite any formulas for the template.
The template is provided as a guide. Please ensure all the relevant information required by the template is included and easy to identify.
Entrants to Breakthrough 3 will have two IPR options to choose from:
Option 1 – default IPR terms(previously known in Round 2 Catalyst as “Background IPR trial terms”)
Option 2 – alternative IPR terms;
Where possible, you should adopt the default IPR terms, which we hope you will find fair and reasonable given the investment of customer money in entries. The aims of these IPR terms are to ensure all customers benefit equally from the innovation funded through the Breakthrough 3.
If for any reason you are unable to adopt the default IPR terms, we ask you to share more details about this in your entry form in requesting alternate IPR terms, which are reviewed on a case-by-case basis by Ofwat.
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.
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:
