‘Fundamental reset' needed for UK's water industry
The water sector in England and Wales needs a 'fundamental reset' after being plagued with 'deep-rooted, systemic' failures, according to a new report.
In an interim report published on Tuesday, the Independent Water Commission calls for a 'fundamental strengthening and rebalancing' of Ofwat's regulatory role, calling for the watchdog to adopt a more supervisory approach to its oversight of water firms.
This could include benchmarking companies against one another to justify customer bills and assess efficiency.
It also urges the Government to provide clearer direction, proposes greater regional decision-making around local water systems and emphasises the need for a greater focus on long-term, responsible investment and ownership within the industry.
Independent Water Commission chairman Sir Jon Cunliffe said he had heard a 'strong and powerful consensus' that the system was not working for everyone.
'There is no simple, single change, no matter how radical, that will deliver the fundamental reset that is needed for the water sector,' he said.
'We have heard of deep-rooted, systemic and interlocking failures over the years – failure in Government's strategy and planning for the future, failure in regulation to protect both the billpayer and the environment and failure by some water companies and their owners to act in the public, as well as their private, interest.
'My view is that all of these issues need to be tackled to rebuild public trust and make the system fit for the future. We anticipate that this will require new legislation.'
New national infrastructure and resilience standards are also under consideration, requiring companies to regularly report on the health of their assets.
'This means companies do not just fix failures when they fail, but responsibly plan for the long-term condition and resilience of these critical assets,' the report said.
The report also highlighted the need for the sector to 'attract and retain' long-term investors but acknowledged this would require restoring investor confidence in both the sector and its regulators.
'I believe that ambitious reforms across these complex and connected set of issues are sorely needed,' Sir John said.
Legislation around water was 'complex' and 'inconsistent in places', according to the interim report which said the legislation has evolved in a 'piecemeal fashion over a long period of time', with 'currently around 80 pieces of legislation covering the sector'.
'The commission is considering options to move from the complex planning process we have now to a regional 'systems planning' approach in England,' the report said.
'It means bringing decisions on water systems, such as where new infrastructure is built or how pollution from different sources should be tackled, closer to the communities who depend on them.'
More than 50,000 responses from the public, campaigners, industry and the regulators were sent in to the commission's call for evidence which ran between February and April.
The commission's full conclusions and detailed recommendations will be published later in the summer.
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