Raising the bar for asset management in the water sector: Ofwat’s asset maturity consultation
Published on 17 June 2025
Ofwat has launched a consultation on improving the asset management maturity of water companies in England and Wales.
Why it matters
The proposal aims to replace outdated regulatory requirements with a forward-looking framework that aligns with international best practices. At its core, it’s about ensuring long-term resilience, transparency, and accountability in how water companies manage their assets.
Is this new for the industry?
Generally, the industry has been incentivised to understand the health and risk associated with its assets through the regulatory framework; the better the companies understand their assets, the more persuasive their investment case and the more favourable their settlement under the price review.
So, while companies have been working to improve their internal capabilities, these proposals should be seen as a positive move for the industry. Companies remain under the spotlight for their performance and investment decisions, and the adoption of an internationally recognised accreditation should help to improve trust, legitimacy and consistency.
There is, however, some nuance for companies to consider in their response to this consultation; from assurance and reporting to adoption and comparison across organisations of differing size, complexity and maturity.
Key highlights
Licence changes
The consultation proposes a new licence condition for every company, mandating that they regularly assess and report on their asset management maturity status.
Ofwat are also consulting on removing Condition L, which focuses on underground asset plans.
Global standard
A new licence condition will require companies to achieve and maintain ISO 55001:2024 certification.
This includes:
- Annual audits and recertification every 3 years
- Use of accredited assessors
- Clear definition of asset management system boundaries
Maturity matters
Every five years, companies must conduct a self-assessment of their asset management maturity – ideally using the The Institute of Asset Management's Self-Assessment Methodology+ (SAM+) tool.
The goal? Reach at least 'competent' maturity, with 'excellent' as the stretch target. This will replace the bespoke questions of Ofwat’s asset management maturity assessment, which align with the investment planning elements of ISO 55001.
Transparency and accountability
Ofwat may require companies to publish maturity scores and report progress through annual performance reports. These insights will feed into an asset management maturity assessment, which will look at sector-wide trends and recommendations.
What’s next?
The consultation closes on 5 September 2025, with licence changes expected Spring 2026. The resulting transition period will be shaped by industry feedback.
Shift the focus
We see the drive to formalise and embed robust asset management approaches as a real positive for the sector.
Broadening out Ofwat’s asset management maturity assessment to cover the whole scope of ISO 55001 will help shift the focus from regulatory cycles to a continuous improvement approach. It will also enable better direct comparisons with other sectors. As the saying goes, "what gets measured, gets done".
We look forward to contributing our thoughts through the formal consultation process.
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