Ref No.: 26 22
Request Type: EIR
Date Received: 16/11/22
Date Responded: 14/12/22
Category: 2020-21 Wastewater capex
We're hoping to update our analysis with the 2021-22 wastewater capex for water and wastewater companies in England and Wales, as well as Scottish Water, and I was wondering if you might have an updated version of this dataset with the 2021-22 figures?
In response to your request, please find attached the consistent time series of wastewater capital expenditure updated for 2021-22. Information for the companies in England and Wales is as reported in the published annual performance reports for 2021-22. Information for Scottish Water is sourced from the G tables from the Scottish Water annual return.
Since your initial enquiry, Ofwat has published a long-term data series of water company capital investment over time (published on 21st November 2022). It is available at the following link: https://www.ofwat.gov.uk/publication/long-term-data-series-of-company-costs/. You will also see this in the sheet ‘Ofwat reported capex’ in the attached spreadsheet.
We have compared the numbers that we have collected from the companies England and Wales against Ofwat’s recently published numbers. There are two differences:
- Ofwat’s reported values include renewals expensed as operating expenditure, while the information that we have produced does not on the basis that this is no longer treated as capital expenditure.
- Ofwat applies different inflation to the values that we have previously provided to you. In the Ofwat data, RPI is used until 2019-20 and then CPIH from 2020-21 onwards. In the data that we have provided RPI is used until 2020-21 and then CPI is used from 2021-22 onwards. This is consistent with how we are indexing investment in our Final Determination for the regulatory control period 2021-27 given that RPI is no longer a recognised national statistic.
Recognising the differences, we have provided the comparison based on our previous dataset (updated to 2021-22) and the new Ofwat dataset.
- See sheet ‘Original analysis updated’ for the comparison based on our previous data set
- See sheet ‘Analysis using Ofwat investment’ for the comparison based on the new Ofwat dataset. You will see that the investment per head in Scotland is higher based on the Ofwat dataset on the basis that we include Scottish Water’s renewals expensed as operating expenditure, to ensure that the comparison is like-for-like.
As you would expect, the results from both comparisons are very similar.