Ofwat’s approach to asset management maturity

Published: 13 November 2025

Ofwat has recently published the outcome from their consultation on the proposal to improve asset management maturity for the water sector.

The consultation sought views on proposed changes to licence conditions which would require companies in England and Wales to:

achieve and maintain ISO 55001:2024 certification to demonstrate competency in asset management; and
undertake an asset management maturity assessment per Asset Management Plan (AMP) period.

Highlights from the report

Following feedback from companies and stakeholders, Ofwat have changed their approach and will no longer require ISO 55001:2024 certification in the licence conditions, instead allowing companies more flexibility in how to demonstrate competency.
Ofwat will still recognise ISO 55001:2024 as best practice and this will be their preferred method, but companies can also have their asset management competency assessed by an independent practitioner.
Those companies who already hold ISO 55001:2014 certification will be expected to transition to the 2024 standard at the time of their recertification or by 31 July 2027, in-line with UKAS’ requirements.
Companies will need to report yearly via the annual performance reporting process.
An asset management maturity assessment will not be a requirement of the licence conditions but will instead be used for sector-wide reporting, once per AMP period.
The new licence conditions will also set out a minimum scope of asset management systems which will be covered by the new licence conditions, with operational assets used for delivering regulated services as a minimum.

What this means for companies

We recognise that Ofwat’s proposed approach and increased flexibility will be especially beneficial for smaller companies who may find the costs and resource requirements for ISO certification to be prohibitive.

However, for those companies not seeking to become certified, Ofwat have indicated they may be subject up to a greater level of scrutiny than those companies with ISO 55001:2024 certification.

Companies will have a two-year lead time from the date of the licence changes, giving companies at different stages of maturity time to implement changes needed to meet requirements or gain certification.
There will be an expectation that independent assessors for ISO certification will be UKAS-accredited or IAM-endorsed, and those completing competency assessments should be suitably competent.

Ofwat will consult on the draft changes to company licence conditions shorty which will include reporting requirements, guidance on the scope of asset management systems, and how best to evidence requirements for competency assessments.

How we can help

Excellence and impact

With over two decades of experience in asset management, we have a proven track record as a trusted partner in delivering strategic value for utilities organisations navigating complex regulatory, operational, and sustainability challenges.

Our approach is underpinned by ISO 55001 principles and enhanced by our status as Institute of Asset Management (IAM)-accredited assessors. Consultants hold IAM Certificate and Diploma qualifications, ensuring technical rigour and strategic insight in every engagement.

Through our IAM-accredited asset maturity assessments, organisations gain a clear view of strengths and gaps, enabling structured improvement programmes.

Connecting purpose to performance

Asset management is more than just maintenance or compliance; it’s about creating long-term value by balancing cost, risk, and performance.

We help organisations align corporate objectives such as affordability, resilience, and net-zero with operational realities through strategic asset management plans. These plans are the golden thread linking operational goals to day-to-day decisions, supporting informed investment decisions and robust business cases.

Find out more