Capital Maintenance expenditure as the name implies covers the maintenance of assets such that the existing service to customers can be maintained. The level of service is measured by parameters such as: mains pressure, interruptions and bursts, contravention of coliform standards at water treatment works, sewer flooding, collapses and pollution incidents and sewage treatment works compliance.

Capital maintenance expenditure represents the largest element of the 2010-2015 capital programme at nearly 60% of capital expenditure. It is split into infrastructure and non- infrastructure expenditure. Infrastructure expenditure is mostly below ground assets like water and sewerage mains. While non-infrastructure is the above ground assets like water treatment plants

The water industry has, in the last few years, adopted a relatively new approach to assessing capital maintenance requirements called the 'common framework'. This approach is risk based. Historically capital maintenance expenditure had principally been based on historic expenditure and assumed asset lives. The Common Framework aims to take into account the effect of capital maintenance expenditure on the performance of the asset and the risks incurred if the asset fails. It has tended to lead to substantially higher levels of capital maintenance expenditure.

Serviceability is a key concept introduced by Ofwat in determining levels of capital maintenance expenditure. It looks at whether the overall condition of the assets is such that their ability to deliver the required performance is improving, deteriorating or is stable.