Background: water sector in 2026
England’s water sector is midway through one of the most significant regulatory resets since privatisation in 1989. Following the Independent Water Commission’s (Cunliffe Review) 88 recommendations published in July 2025, including the abolition of Ofwat and the creation of a new single regulator – the Government published its white paper, a new vision for water, on 20 January 2026. A 2026 Transition Plan and a Water Reform Bill are expected to follow, alongside £104 billion of committed sector investment for 2025-2030 (AMP8).
What the new NPPF says
Government published the fully rewritten National Planning Policy Framework (NPPF) on 17 August 2026 – the first full rewrite since 2012. It restructures planning policy into coded plan-making and decision-making policies and introduces a permanent presumption in favour of suitably located development.
For water specifically:
Water infrastructure is now explicitly part of growth planning: Policy W1 requires early engagement between planning authorities, utility providers, regulators, and network operators to understand water supply, drainage, and wastewater capacity. These considerations should inform the location and phasing of development and help identify infrastructure requirements. (NPPF, p.48, Policy W1)
Stronger planning support for water infrastructure: Policy W4 gives substantial weight to water supply, drainage and wastewater infrastructure that provides capacity for development, improves security of supply, and improves water quality. It also removes the need for applicants to demonstrate the need for water infrastructure, potentially making planning consent for essential water infrastructure more straightforward. (NPPF, p.49, Policy W4)
Flood risk is covered through a dedicated chapter of nine coded policies (F1–F9), covering strategic flood-risk assessment, the Sequential and Exception Tests, development safety, sustainable drainage, and coastal change. (NPPF, p.83 onwards, Policies F1-F9).
SuDS requirements are strengthened: Policy F8 requires Sustainable Drainage Systems to be designed in accordance with the National Standards for Sustainable Drainage Systems, with arrangements for their maintenance over the anticipated lifetime of the development. Major developments should also take account of Lead Local Flood Authority advice. (NPPF, pp.86-87, Policy F8).
The Sequential Test is not required where a site-specific flood-risk assessment demonstrates that all proposed development and relevant access routes will be located outside areas at risk of flooding from any source. (NPPF, pp.84-85, Policy F5)
The Exception Test is retained for higher-risk river and coastal flood zones, with the framework making clear that development must not increase flood risk elsewhere. (NPPF, pp.85-86, Policy F6)
What this means for the sector
Water becomes part of growth planning, not just development consenting: water supply, drainage and wastewater capacity are now explicitly linked to decisions about where and when development comes forward. This gives water companies and regulators a more central role in shaping growth plans. It is particularly interesting in the context of drought and increasing water scarcity – the NPPF creates a clearer planning route for considering whether there is enough resilient water supply to support future growth, rather than treating water as an issue to resolve after development is planned.
Stronger planning case for water infrastructure investment: the NPPF gives greater planning weight to water supply, drainage, and wastewater infrastructure, particularly where it provides capacity for development, improves security of supply or water quality. Removing the need for applicants to demonstrate the need for water infrastructure also cuts out a layer of justification, potentially making the planning process more straightforward.
Earlier and higher expectations around drainage and flood risk evidence: SuDS, flood-risk assessments and infrastructure capacity need to be considered earlier in the development process. Water companies get a chance to influence development earlier – but they also need to be ready to engage earlier.
More predictable consenting, but clearer requirements to meet: the changes to the Sequential Test could remove some unnecessary site-by-site testing, while the more explicit flood, drainage and infrastructure requirements create a clearer evidence base for planning decisions.
Water could still limit where development happens: the NPPF supports new development, but developers still need to show that there is enough water and wastewater capacity, and that drainage and flood risks can be managed. This means water companies have a bigger role in determining whether and where new development can go ahead.
Concluding thoughts
Against a backdrop of growing water scarcity and low public trust in the water sector, the pressure to demonstrate that growth can be delivered responsibly is increasing.
The NPPF marks an important shift by bringing water supply, wastewater, drainage and flood risk further into the planning of where and how development takes place. This is reinforced by the National Framework for Water Resources 2025, which highlights the growing pressure on water resources and the need for water resources planning to support growth across housing, the economy and emerging sectors such as AI.
For the water sector, developers and local authorities, the focus is therefore shifting towards earlier engagement, better evidence and closer coordination between growth ambitions and the infrastructure and resources needed to support them.
The key question is no longer simply whether water infrastructure can support development, but whether growth and water can be planned together from the outset.