Asset health data: a call to action for water companies

As Ofwat refines its roadmap for enhancing understanding of asset health, the water sector could be on the brink of a significant data-driven transformation into 2026. The roadmap, detailed in the regulator’s PR24 final determinations, has been undergoing consultation with water companies since January.

Maintaining the health of core assets is crucial for ensuring long-term operational resilience in the water sector. This year, Ofwat plans to put in place requirements for water companies to report on their asset health, to help maintain and improve the long-term health of their assets and facilitate appropriate investment throughout the asset lifecycle.

In this blog, we’ll outline the key requirements that are under consideration for 2026 and how water companies can start to get themselves – and their data – ready for Ofwat’s proposed regulations on asset health.

What is Ofwat’s proposal to enhance asset health using data?

The new data initiative aims to improve the sector's understanding of asset health, focusing on a subset of priority assets over the 2025-27 period. The ultimate goal is to determine if additional base expenditure allowances are needed to address sector-wide asset health issues before PR29.

Ofwat is engaging with stakeholders through consultations this year to refine the proposal and gather feedback on various aspects, such as transition periods for certification and the scope of the asset management system. These sessions aim to develop an asset inventory, identify priority assets, and establish the kind of data needed to understand asset health comprehensively. The focus is on collecting additional asset health and condition data for a subset of assets to assess whether there is a need for additional allowances during the 2025-30 period.

Ofwat’s Asset Health Data Proposal – Key Points

We took the documentation relating to Ofwat’s asset health proposal, to August 2025, and asked our Workplace AI Platform to summarise the key changes:

• Licence Modification & ISO 55001:2024 Compliance: Ofwat intends to introduce a new licence condition that leverages international standards for asset management, specifically ISO 55001:2024. This condition will require water companies to attain and maintain certification, demonstrating they have appropriate systems in place for managing assets.

• Asset Self-Assessment Tools: Companies will be required to demonstrate their asset management maturity through regular self-assessments using the Institute of Asset Management's SAM+ tool. This tool helps measure capability against asset management standards and provides a framework for continuous improvement.

• Asset Condition and Health Data Collection: As part of the enhancing asset health understanding workstream, companies will collect asset condition and health data for a subset of priority assets. This includes data on asset condition surveys and workload (i.e., refurbishment/replacement) data. Companies may need to provide inspection reports and data collected from a representative sample of assets to inform Ofwat's assessment of asset health.

• Data Collection for Historical Workload and Expenditure: Companies will be required to provide historical workload and expenditure data for the priority assets to better understand past investments and asset health.

• Ongoing Monitoring and Reporting: Companies will need to report on their compliance with ISO 55001:2024 and their progress against asset management maturity improvement plans. Ofwat is considering ways to incentivise good asset management performance and may publish companies' maturity scores to encourage improvement. Companies must also report progress against their asset management improvement plan.

When does the asset health reporting requirement come in?

The new asset health reporting proposal includes a transition period for companies to achieve compliance, with plans to make the new licence modifications by Spring 2026. There will be a period before companies need to comply with the new condition.

This year, Ofwat is already consulting with companies to build up an asset inventory and define asset classes, establishing assets to focus on. In 2025-2026, Ofwat is asking water companies to undertake asset condition surveys, and complete information requests to allow them to understand workloads and asset condition.

How can water companies get their asset data ready for Ofwat’s requirements?

The new proposal features data collection and reporting as core new requirements for water companies. To help the regulator gain a holistic view of asset health and make informed decisions about interventions, the requirements look to address inconsistencies in data quality and comparability across water companies and standardise the sector’s approach to data collection.

For 2025-26’s immediate requirements, here’s how we recommend starting to prepare your asset health data collection capabilities.

Preparing asset health data at scale

With Ofwat’s requirements extending to cover thousands of assets and sub-assets, the incoming data reporting requirement is huge. With at least nine potential asset types to monitor, and approximately 18 health factors to maintain across these assets, there are tens of thousands of data points requiring discovery from a full array of data sources.

Accessing, collecting, and collating all necessary data points is key to accurately assess asset health under the proposed requirement. Incomplete data can lead to gaps in understanding the true condition of assets, potentially resulting in underinvestment or misallocation of resources.

To collate, integrate, and ensure data quality at this scale, data leaders need to be looking at AI-enabled automation for their data management and discovery, ready to cope with this demand and fulfil the immediate requirement to share standardised asset data at scale.

AI-powered search solutions can help specifically with:

• Building a complete, navigable data picture: Connecting to disparate data sources, water companies can create a live, centralised index of core asset health data to meet the new requirement. Allowing teams to explore asset data and build the complete data picture to support asset health analysis.

• Using AI and ML to classify and label data at scale: Handling multiple file types and using AI to classify and label data appropriately – think automatic extraction of part numbers, locations, sensitivity markers, and stale or duplicate data. Ready to streamline data and supply what’s needed for Ofwat’s reporting requirements.

• Automating manual data processes: Reducing manual effort by automating regular data discovery and validation for dynamic data fields.

Integrating Asset Data and Improving Data Quality

The challenges with asset data is twofold: ensuring completeness and improving quality. Data must be high quality, accurate, and reliable – not just complete.

To support both data integration and data quality, water companies can leverage AI-powered search solutions to first support with data discovery and collation, and then with improving data quality at scale.

AI-powered search solutions can help specifically with:

• Discovering and extracting key attributes: Automatically identifying and extracting specific asset information from a range of unstructured document sources.

• Validating and populating data in core systems: Cross-referencing this extracted data with existing records in platforms such as SAP, filling gaps and enriching the completeness of asset records.

Once all relevant data points are captured and made accessible, and data quality is improved by interconnecting and enriching records with the data already available in disparate systems, then companies identify, and address improvements needed for their asset monitoring and sensor systems.

Ofwat’s new requirements are an opportunity to invest in data

As the sector embarks on this journey to enhance asset health understanding, addressing data completeness and quality challenges is a non-negotiable – that makes Ofwat’s new requirement an opportunity to prioritise improving how you collect, manage, and use asset data in AMP8.

Ofwat’s requirements are the driving force water companies can use to make strategic investments in technology that handles asset data at scale, ensures data completeness, and improves data quality throughout AMP8.

About Aiimi

Aiimi is a trusted data, digital, and AI partner to the water sector, working with UK water companies including Anglian Water, Northumbrian Water, and Yorkshire Water and an active member of the UK Water Partnership. In AMP7, our expert teams delivered over 180 projects in the water sector, and our Workplace AI Platform is enabling water leaders to manage, protect, and unlock the value of their data with AI.

Read more about our work in water.