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Water companies have statutory duties with regard to water supply, and each company has a water resources plan looking ahead for the next 25 years. These plans show how they will reconcile water supply with projected demand.
A good deal of water is already transferred within water companies' areas of operation to give individual companies greater flexibility to meet local shortages. Longer distance links between water companies also exist. The Environment Agency, in consultation with Ofwat, is able to propose to a water company that it enters into a bulk supply agreement with another water company, where it is necessary to secure the proper use of water resources.
The concept of a national water grid was discussed at the Secretary of State's meeting on 1 June with representatives of water companies and the water industry regulators. It was rejected by all those present on the grounds of its disproportionate and unjustifiable cost, both for the environment and for water bills, compared with the benefits such a grid could deliver.