An example of the difficulties associated with onward distribution systems (regulation 8 supplies)
Introduction
The onward distribution of water from the public supply system by someone other than a water undertaker or licensed supplier constitutes a type of private water supply, known as a regulation 8 supply. Regulation 8 of the private water supplies regulations in England and Wales requires that these supply arrangements must be risk assessed and monitored. The primary legislation, however, makes their creation an offense unless they can be proven to be exempt.
Many of these arrangements result from legitimate intent, often with legal water resale agreements in place. Others are created to intentionally take water illegally and or to eliminate connection costs to a water company’s supply network. Either way, these are unlicensed supplies; however once created they become subject to the requirements of regulation 8 of the private water supplies regulations in England and Wales until a direct connection to an undertaker’s supply system is made.
Very often it is not until these supplies fail in some way, or there is a change in land or property ownership that these supply arrangements come to light. This is often because responsibilities about ownership and costs cannot be agreed between the parties concerned.
Enquiry to the Inspectorate
In October 2025 the Inspectorate was contacted by a local authority for advice regarding an onward distribution system located in the English Midlands, for which responsibility was not clear. For this reason, the local authority was not content to risk assess and monitor it until the recovery of costs for these services was assured. Although they had served enforcement notices to gain information from the parties concerned and sought legal advice to establish ownership of the supply, this was still yet to be established. In the meantime, this impasse meant that risks to the supply remained undetermined and the wholesomeness of the water unverified.
Background and supply arrangements
The supply was being pumped from the local water company’s network to a small group of dwellings via a private pump house and a system of pipes situated on private land. These pipes were allegedly made of alkathene, a material that can cause an undesirable taste and odour to the water. The presence of this suggests that the system was probably around fifty years or more old as this material has long since ceased to be used for the installation of new water pipes.
Until recently the supply also served a farmhouse, the owner of which also used the water and charged those downstream for its consumption under a resale agreement using a third-party billing agent. The farmhouse was later sold on with the new owner not wishing to maintain this business arrangement. The owner claimed that the land was sold with no such encumbrances specified, which was later verified by the local authority. The new owners of the farm have since constructed their own private borehole and have ceased taking water from the regulation 8 supply for themselves.
The question of who exactly owned the distribution system remained unclear until further lengthy and costly investigations by the local authority established that the land on which the distribution system was located belonged to the daughter of the former farmhouse owner. The local authority therefore deemed this to be the relevant person accountable for all costs for their regulatory duties from then on in.
Although technically this supply constituted a regulation 8 private water supply, consumers were nevertheless receiving water unlawfully from an unlicensed private supply as it was created contrary to section 66(I) of the Water Industry Act which makes this an offense. In addition, although the water was being provided via a third-party private distribution system, no water resale or billing arrangements were in place, at least initially. As a result, the water was being taken from the water company’s network unlawfully.
An ideal remedy would have been to disconnect the private supply from the company supply system and install direct connections from it to the individual consumer properties. This would make them customers of the water company. Unfortunately, the consumers turned down this option when it was offered to them by the water company. In the meantime, despite offenses being committed, the water company was not prepared to disconnect the private distribution system from their network on the basis that without water the consumers’ properties would be unsanitary and inhabitable.
Conclusions and learning to date
The original intention of regulation 8 was seemingly to provide a means of regulating onward distribution until their unauthorised nature could be remedied. Realistically however this does not happen for various reasons, each case presenting its own dilemmas and challenges. This case study has illustrated one such example.
One of the problems is that very often the responsibility for asset ownership and management of these supplies is unclear or even non-existent. This leads to difficulties for local authorities in apportioning and recovering regulatory service costs and establishing the necessary relevant person(s) on whom to serve a notice. This can drag on, leading to protracted potential risk to consumers. In this case the responsible person was eventually identified by the local authority but not without lengthy investigations and costly legal fees.
The termination of regulation 8 supplies to address their illegal nature is likely to render properties unhabitable. Furthermore, the necessary remedial funding to put in place a suitable alternative may be beyond the means of property owners. There are no grants available for consumers to fund an alternative when this occurs.
These matters are not always easily resolved and, in some cases, can last for years. In the meantime, consumers remain potentially and unknowingly at risk of insufficiency and unwholesome supplies.
This case studies illustrates just one example of the complexities surrounding regulation 8 and the onward distribution of water from a public supply by someone other than a licenced supplier. It shows a typical regulation 8 supply, where water is being onwardly distributed free of charge. It is anticipated that the water company will, in due course, bill the owner of the private distribution system, who will then charge the end users for water consumed. Nevertheless, this is an unlicenced supply, which is breach of section 66(I) of the Water Industry Act 1991.