Sector-wide cost adjustment claims involving mains renewal, meter replacement and network reinforcement 47. We will evaluate these claims, including Ofwat’s approach to retrospective adjustments. We recognise that our decisions on these claims could have impacts on all the Disputing Companies. Disputing Company-specific cost adjustment claims 48. We will evaluate the following claims:
(a) an Anglian claim for Ј150 million for storage points and gravity sewers; (b) Anglian and Southern claims relating to boundary boxes; (c) a Northumbrian claim for Ј180 million for civil structures and service reservoirs; (d) a Northumbrian claim for Ј47 million for climate change adaption; (e) a Southern claim for Ј101 million for sludge treatment centres; and (f) Wessex claims for Ј178 million for bioresources and Ј47 million for disinfection at water treatment centres, unless we consider, following consultation with Ofwat and Wessex, that these claims are expected to be addressed by Ofwat through an alternative route. Other claims involving asset health 49.
We plan to deprioritise the issues raised by Disputing Companies relating to asset health which are not covered in paragraphs 47 and 48. (a) First, consideration of more fundamental changes to the regulatory framework are best addressed through industry-wide policy work, outside of these redeterminations. (b) Second, following the CMA’s suggestion in its PR19 redeterminations and wider recognition of this issue, Ofwat has accepted the need to incorporate a ‘forward-looking’ element when setting base cost allowances.
23 While Ofwat is reviewing its approach to asset health, it told us that the complexities involved meant it was unable to install a 23 CMA (2021) Anglian Water Services Limited, Bristol Water plc, Northumbrian Water Limited and Yorkshire Water Services Limited price determinations Final Report , paragraph 4.293; National Infrastructure Commission (2024) Developing resilience standards in UK infrastructure , page 9; and Ofwat (2025) Expenditure allowances – addressing asset health , paragraphs 2.7 and 2.9. 14