Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, what assessment he has made of how the recommendations of the HM Treasury report entitled Smoothing Investment Cycles in the Water Sector, published in July 2012, have affected the water sector.

Ofwat worked closely with HM Treasury and Infrastructure UK on the Smoothing Investment Cycles in the Water Sector report. In response to the recommendations of that report, Ofwat has continued to work with water companies and Infrastructure UK on action to address the up and down ‘cyclical investment' that has affected the sector for many years.

This change in approach has had tangible outcomes. For example, in responding to incentives that Ofwat introduced in its methodology for the price review, water companies have stated in their business plans (December 2013) that they are bringing forward around £440 million of investment into 2014-15 to smooth the investment profile. This investment will improve the delivery of service outcomes to customers, support the supply chain and enable efficient delivery.