Ofwat should be replaced as part of major water industry reset

Monday 21 July 2025 7:52 am

A evaluate into the UK’s troubled water trade has really helpful Ofwat be scrapped as a part of a whole regulatory overhaul.

Sir Jon Cunliffe, the previous Financial institution of England deputy governor, known as for a single built-in regulator in each England and Wales to make sure personal corporations act within the “public in addition to personal curiosity.”

In England, the brand new physique would change Ofwat, the Ingesting Water Inspectorate and any “water-environment” associated capabilities of the Atmosphere Company and Pure England. In Wales, Ofwat’s financial duties could be subsumed by Pure Assets Wales.

Cunliffe’s much-anticipated report outlines 88 suggestions aimed toward restoring public belief amid sky-high payments and extreme sewage leaks. The modifications would mark the most important set of reforms since privatisation in 1989.

“Restoring belief has been central to our work,” Sir Jon mentioned on Monday. “Belief that payments are truthful, that regulation is efficient, that water corporations will act within the public curiosity and that traders can get a good return.

“Our suggestions to realize this are important. They embrace the administration of the entire water system, regulation of the water trade, the governance and monetary resilience of water corporations and a stronger voice for native communities and water clients.”

The Cunliffe evaluate additionally recommends larger safety for billpayers, together with upgrading the Shopper Council for Water into an Ombudsman for Water and transferring client advocacy to Residents Recommendation.

This might be coupled with a nationwide social tariff to assist tackle “broadly completely different ranges of assist” throughout the nation.

Cunliffe requires Ofwat reset

UK water corporations are underneath immense scrutiny after years of underinvestment in infrastructure, extreme dividend payouts and hovering air pollution incidents.

Thames Water, the UK’s greatest water provider, is going through momentary nationalisation amid a debt pile of greater than £16bn.

Ofwat has beforehand authorised important invoice hikes to assist infrastructure and operational enhancements, with companies set to spend round £104bn over the following 5 years.

Amongst Cunliffe’s different suggestions are necessary water metering and the creation of eight new water sector planning authorities in England to fast-track the

The report, which incorporates 88 suggestions, suggests a brand new single built-in regulator to exchange present water watchdogs, necessary water metering, and a social tariff for weak clients.

Cunliffe argued for the creation of eight new regional water system planning authorities in England and one in Wales, to streamline the planning course of.

His evaluate additionally argued for “tighter oversight” of water firm possession, together with new powers for the regulator that may block modifications in instances the place traders aren’t seen to have prioritised the “long-term pursuits” of consumers.

“Resetting this sector and restoring pleasure in the way forward for our waterways issues to us all,” Sir Jon mentioned.

“In numerous conversations within the final 9 months I’ve been struck by the pressing want and keenness for change. Doing it will require laborious work, robust management and sustained dedication. However it could actually and have to be carried out.”