UK Business Water Use Is Changing: New Policies, Targets and the Case for Water Reuse

Major changes to UK water policy, pricing and demand are set to reshape how businesses use water over the next decade.

Falling block tariffs are being phased out, business water consumption is rising and new water efficiency targets are being introduced.

Yet many organisations still don’t understand how these changes will affect their future operating costs, compliance requirements and environmental commitments.

Water reuse is quickly moving from a sustainability “nice-to-have” to a business necessity.

In this article, we connect the latest policy changes, research and industry targets to explain what they mean for business water users, and why technologies such as rainwater harvesting and greywater recycling are becoming essential for long-term resilience.

We will cover…

• What the growing UK water deficit means for businesses
• Why falling block tariffs are being phased out by 2030
• The latest research on rising business water consumption
• The new targets published by government
• Why new business properties are not guaranteed to have a water supply
• What you need to know about water reuse and the next steps for your organisation

For many years, large water users have benefited from ‘falling block tariffs’, a pricing structure where the more water a business uses, the cheaper each unit becomes. This has historically helped keep water costs low for high-consumption organisations such as commercial buildings, manufacturing facilities and large developments.

However, regulators now view this pricing model as a barrier to water efficiency. Ofwat has instructed water retailers to phase out falling block tariffs between April 2026 and 2030 as part of wider efforts to reduce water demand.

The result is a significant shift in how businesses will pay for water.
Organisations that have relied on low unit costs for high consumption should expect their water bills to rise over the coming years.

Reducing mains water consumption will become increasingly important for cost control. As water prices move away from volume discounts, rainwater harvesting and greywater recycling will play a growing role in helping businesses manage rising operating costs.

Businesses planning to expand or build new premises need to consider water availability earlier than ever before.

Key points to understand:

• Businesses expanding an existing site or developing a new property must apply for planning permission.
• A request for a new water connection must also be submitted to the local water company.
• Under the Water Industry Act 1991, water companies can refuse new non-household connections where local water resources are under pressure.
• In water-stressed areas, limited supply could delay projects, increase development costs, or prevent expansion altogether.
• Demonstrating reduced demand for potable (drinking) water is becoming increasingly important when applying for new connections.
• Water reuse systems can reduce reliance on mains water by supplying non-potable uses such as toilet flushing and irrigation.
• Lower projected potable demand may support successful connection applications and future-proof new developments.

Recent research by Public First, in collaboration with Waterwise and MOSL, highlights a concerning trend: many UK businesses are expecting to increase their water use over the coming years despite growing water scarcity pressures.

Key findings include:

• 50% of businesses say their water intensity has increased over the past five years
• 38% plan to increase water usage over the next five years
• In the South of England, this rises to 46% of businesses expecting higher water use
• Full findings are available in the Public First report for further detail

Taken together, the research suggests that business water demand is set to rise at the same time as supply pressures intensify.

Water reuse is therefore becoming a key strategy for organisations that need to expand or maintain operations while reducing reliance on increasingly constrained mains water supplies.