Labour's drive to build AI data farms 'will send water bills rocketing' by 30 per cent over next five years, report warns
The banks of computer equipment needed to advance AI models require huge volumes of water to fuel cooling systems.
Ministers will also scrap the regulator Ofwat to make way for a new body to try to tame 'Wild West' water firms after the recommendations.
But consumers will also pay the price of tackling future sewage spills and renewing crumbling infrastructure.
The report's author – Sir Jon Cunliffe, a former deputy governor of the Bank of England – made 88 recommendations to turn around the ailing industry.
His Independent Water Commission review tackles the issues of pollution, soaring bills and staggering pay awards and bonuses for failing company bosses.
In the report, he warns that bills will have to rise because of a failure to invest in the sector amid a growing population and climate change.
He also says that Labour policies including building 1.5 million more homes and more data centres to power AI will put 'pressure' on the system.
The report's author – Sir Jon Cunliffe, (pictured) a former deputy governor of the Bank of England – made 88 recommendations to turn around the ailing industry
Sir Jon also recommended the introduction of social tariffs to provide support for customers who are unable to pay their bills.
He told BBC Radio 4's Today programme yesterday: 'The inescapable fact is that it costs more to produce drinking water and it will cost more to deal with our waste water as we go forward.
'When you look at the pressures on the water system – look at population growth [and] we want to have data centres in this country – they put huge demands on water.
'We have to accept them. But we have to plan for them, we have to decide where the priorities are, and we have to decide how to manage the trade-offs. At the moment, that is just not happening.'
The report also said that data centres used by AI companies have a 'high water need'.
It cited research from Oxford University that argued 'regional water stress must be considered for each data centre'.
In January, Sir Keir launched an 'AI Opportunities Action Plan', which welcomed billions in investment from overseas tech companies to build data centres in the UK.
Environment Secretary Steve Reed said yesterday that the Government would scrap the watchdog Ofwat, adding that the water industry is 'broken' and has been allowed to fail under a 'regulatory system that let them get away with it'.
'Our rivers, lakes and seas are polluted with record levels of sewage,' he said.
He promised to create a 'single, powerful' regulator, bringing the four bodies responsible for water under its control.
He also pledged to cut sewage pollution levels in 2024 by half by 2030 through a series of measures including public and private investment.
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