Ofwat will raise the size of its innovation fund to £300m, as it looks to encourage companies to be more efficient and come up with new ideas to improve the sector and offer benefits for customers.

This includes greater use of markets to provide better value for customers, and assessing how major investment projects are procured, and the operation of developer services and bio-resources.

The £300m package is a 50 per cent hike on the current fund, and has been included in the watchdog’s upcoming price review (PR24), which will cover spending allocations for companies over the 2025-2030 period.