Ministers to pledge ‘root and branch reform' of water industry

Independent

18-07-2025

Labour is to promise families will no longer face the prospect of 'huge shock hikes' in their water bills after a complete overhaul of the sector, it has been reported.
Environment Secretary Steve Reed is expected to pledge a 'root and branch' reform of the water industry on Monday, saying that 'regulation has failed customers and the environment'.
He will promise that 'hardworking British families will never again face huge shock hikes to their bills like we saw last year', according to a report in The Times.
Water bills rose by an average of 26% in April, with the cost of repairing long-neglected infrastructure said to be a significant factor.
It is understood that Mr Reed's promised reforms, along with greater investment in the crumbling sewerage network, are expected to make further significant increases unnecessary.
Monday's reforms have also been widely reported to include the abolition of water regulator Ofwat.
The beleaguered regulator has faced widespread criticism in recent years for failing to curb sewage discharges into rivers while allowing increasingly debt-ridden water companies to continue paying large dividends to their shareholders.
On Friday, Downing Street did not deny that it was preparing to abolish Ofwat, and a spokesman said the Government would wait for a report from Sir Jon Cunliffe, who has been conducting a major review of the industry.
In his interim report, Sir Jon criticised the division of water regulation between economic regulator Ofwat, the Environment Agency and the Drinking Water Inspectorate.
The former Bank of England deputy governor is due to publish his final report on Monday, which is likely to recommend replacing Ofwat with a single regulator for the whole water industry.
On Friday, a report by the Environment Agency found serious pollution incidents caused by water firms across England rose by 60% in 2024.
The watchdog disclosed consistently poor performance from all nine water and sewerage firms in the country, despite its expectations for pollution incidents to decrease.
Every year it records the number of times pollution, including untreated sewage, is released into waterways from water company infrastructure such as pumping stations, pipes and treatment works.
The figures, released on Friday, show companies recorded a total of 2,801 incidents, a 29% increase on the 2,174 recorded in 2023.
But the number of so-called category one and category two incidents, the most serious, rose by 60% from 47 to 75.
Three water firms were responsible for 81% of these serious incidents – Thames Water with 33, Southern Water with 15, and Yorkshire Water with 13.
Meanwhile, just two companies, Northumbrian Water and Wessex Water, had no serious incidents last year, meeting the Environment Agency's expectations to see a trend to zero serious pollution incidents by 2025.
Mr Reed called the figures 'disgraceful' and a 'stark reminder' of how underinvestment and weak regulation have led to sewage polluting England's waterways.