Latest news with #Independent Water Commission
Reuters
4 days ago
- Business
- Reuters
What are the key recommendations for reforming UK's water sector?
LONDON, July 21 (Reuters) - An official report released on Monday outlined a plan to overhaul Britain's water sector, seeking to better protect the environment, investors, and consumers. The privatised water industry in England and Wales has sparked widespread anger by releasing record levels of sewage into rivers and lakes, prompting the Labour government to promise major reforms when it was elected last year. Below are the highlights of the report's 88 recommendations by the Independent Water Commission: The report recommends a single water regulator in England and one in Wales to replace the current fragmented regulatory system. This would streamline oversight, close regulatory gaps, and boost investor confidence as the sector faces major challenges from climate change and population growth, the report said. The Commission recommended tighter oversight of water company ownership and governance, including powers for the regulator to block changes in ownership if investors are not seen to be prioritising the long-term interests of the company and its customers. It recommended that the regulator set "minimum capital" requirements so that companies are less reliant on debt and more financially resilient. The Commission called for a reset of economic regulation with a new "supervisory" approach for tailored oversight and earlier interventions. It also recommended changes to the Price Review process to ensure proper investment and attract long-term, low-risk funding. The report proposed creating eight new regional water planning authorities in England and one national authority in Wales. They would be responsible for developing water investment plans, streamlining existing planning processes, directing funding and ensuring accountability from all sectors that impact water. The Commission called for a National Water Strategy covering at least 25 years and with regular milestones. The strategy should guide cross-sector water use and be supported by ministerial priorities to guide regulation. The report recommended a national social tariff to ensure consistent support for low-income customers who need help to pay their bills, addressing current regional disparities. The report urged stronger environmental regulation, including improved monitoring, stricter rules on abstraction, sludge, drinking water standards and water supply. It recommended compulsory water metering, revised tariffs for industrial users, expanded water reuse and rainwater harvesting schemes. It also set out where environmental legislation needs updating. The report called for reforms in how water infrastructure is managed, monitored and delivered, including new requirements for companies to map and assess their assets.
Sky News
4 days ago
- Business
- Sky News
Compulsory water meters and blocking takeovers - key recommendations from landmark report into 'broken' water industry
The system for regulating water companies in England and Wales should be overhauled and replaced with one single body in England and another in Wales, a once-in-a-generation review of the sector has advised. The report, which includes 88 recommendations, suggests a new single integrated regulator to replace existing water watchdogs, mandatory water metering, and a social tariff for vulnerable customers. The ability to block companies being taken over and the creation of eight new regional water authorities, with another for all of Wales to deliver local priorities, has also been suggested. The review, the largest into the water industry since privatisation in the 1980s, was undertaken by Sir Jon Cunliffe, a career civil servant and former deputy governor of the Bank of England who oversaw the biggest clean-up of Britain's banking system in the wake of the financial crash. He was coaxed out of retirement by Environment Secretary Steve Reed to lead the Independent Water Commission. Final recommendations of the commission have been published on Monday morning to clean up the sector and improve public confidence, as bills rise 36% over the next five years. Here are its nine key recommendations: • Single integrated water regulators - a single water regulator in England and a single water regulator in Wales. In England, this would replace Ofwat, the Drinking Water Inspectorate and water-environment related functions from the Environment Agency and Natural England. In Wales, Ofwat's economic responsibilities would be integrated into Natural Resources Wales. It's hoped this will solve the "fragmented and overlapping" regulation, and more stable regulation will improve investor confidence. Communications regulator Ofcom was given as an example of how combining five existing regulators into one worked. • Eight new regional water system planning authorities in England and one national authority in Wales to be responsible for water investment plans reflecting local priorities and streamlining the planning processes. The new authorities would be independent, made up of representatives from local councils, public health officials, environmental advocates, agricultural voices and consumers. The aim is they could direct funding and ensure accountability from all sectors impacting water. • Greater consumer protection - this includes upgrading the consumer body Consumer Council for Water, into an Ombudsman for Water to give stronger protection to customers and a clearer route to resolving complaints. Advocacy duties are to be transferred to Citizens Advice. • Stronger environmental regulation, including compulsory water meters. Also proposed by Sir Jon are changes to wholesale tariffs for industrial users and greater water reuse and rainwater harvesting schemes. A new long-term, legally binding target for the water environment was suggested. • Oversight of companies via the ability to block changes in ownership of water businesses when they are not seen to be prioritising the long-term interests of the company and its customers, and the addition of "public benefit" clauses in water company licences. To boost company financial resilience, as the UK's biggest provider, Thames Water struggles to remain in private ownership, the commission has recommended minimum financial requirements, like banks are subject to. This could mean utilities hold a certain amount of cash. It's hoped this will, in turn, make companies more appealing to potential investors. • The public health element of water has been recognised, and senior public health representation has been recommended for regional water planning authorities, as have new laws to address pollutants like forever chemicals and microplastics. • Fundamental reset of economic regulation - including changes to ensure companies are investing in and maintaining assets to help attract long-term, low-risk investment. A "supervisory" approach has been recommended to intervene before things like pollution occur, rather than penalising the businesses after the event. • Clear strategic direction - a long-term, 25-year national water strategy should be published by the UK and Welsh governments, with ministerial priorities given to water firms every five years. • Infrastructure and asset health reforms - companies should also be required to map and assess their assets and resilience. Nationalisation of the water industry was not in the Independent Water Commission's terms of reference and so was not considered. How has the report been received? In a speech responding to Sir Jon's report, Mr Reed is set to describe the water industry as "broken" and welcome the commission's recommendations to ensure "the failures of the past can never happen again". The water industry lobby group Water UK said "fundamental change has been long overdue". "These recommendations should establish the foundations to secure our water supplies, support economic growth and end sewage entering our rivers and seas," a spokesperson said. "The Independent Water Commission has written a comprehensive, detailed review of the whole sector, with many wide-ranging and ambitious recommendations. "Crucially, it is now up to government to decide which recommendations it will adopt, and in what way, but the commission's work marks a significant step forward." Campaign group Surfers Against Sewage said the report "utterly fails to prioritise public benefit over private profit". "This is not transformational reform, this is putting lipstick on a pig - and you can bet the champagne is flowing in water company boardrooms across the land," said its chief executive, Giles Bristow. "Only one path forward remains: a full, systemic transformation that ends the ruthless pursuit of profit and puts the public good at the heart of our water services," he said. "We welcome Sir Jon's calls for a national strategy, enshrining public health objectives in law and regional water planning. But we won't be taken for fools - abolishing Ofwat and replacing it with a shinier regulator won't stop sewage dumping or profiteering if the finance and ownership structures stay the same."
Sky News
4 days ago
- Business
- Sky News
Abolishing Ofwat and compulsory water meters - key recommendations from landmark report into 'broken' water industry
The system for regulating water companies in England and Wales should be overhauled and replaced with one single body in England and another in Wales, a once-in-a-generation review of the sector has advised. The report, which includes 88 recommendations, suggests a new single integrated regulator to replace existing water watchdogs, mandatory water metering, and a social tariff for vulnerable customers. The ability to block companies being taken over and the creation of eight new regional water authorities, with another for all of Wales to deliver local priorities, has also been suggested. The review, the largest into the water industry since privatisation in the 1980s, was undertaken by Sir Jon Cunliffe, a career civil servant and former deputy governor of the Bank of England who oversaw the biggest clean-up of Britain's banking system in the wake of the financial crash. He was coaxed out of retirement by Environment Secretary Steve Reed to lead the Independent Water Commission. Final recommendations of the commission have been published on Monday morning to clean up the sector and improve public confidence, as bills rise 36% over the next five years. Here are its nine key recommendations: • Single integrated water regulators - a single water regulator in England and a single water regulator in Wales. In England, this would replace Ofwat, the Drinking Water Inspectorate and water-environment related functions from the Environment Agency and Natural England. In Wales, Ofwat's economic responsibilities would be integrated into Natural Resources Wales. It's hoped this will solve the "fragmented and overlapping" regulation, and more stable regulation will improve investor confidence. Communications regulator Ofcom was given as an example of how combining five existing regulators into one worked. • Eight new regional water system planning authorities in England and one national authority in Wales to be responsible for water investment plans reflecting local priorities and streamlining the planning processes. The new authorities would be independent, made up of representatives from local councils, public health officials, environmental advocates, agricultural voices and consumers. The aim is they could direct funding and ensure accountability from all sectors impacting water. • Greater consumer protection - this includes upgrading the consumer body Consumer Council for Water, into an Ombudsman for Water to give stronger protection to customers and a clearer route to resolving complaints. Advocacy duties are to be transferred to Citizens Advice. • Stronger environmental regulation, including compulsory water meters. Also proposed by Sir Jon are changes to wholesale tariffs for industrial users and greater water reuse and rainwater harvesting schemes. A new long-term, legally binding target for the water environment was suggested. • Oversight of companies via the ability to block changes in ownership of water businesses when they are not seen to be prioritising the long-term interests of the company and its customers, and the addition of "public benefit" clauses in water company licences. To boost company financial resilience, as the UK's biggest provider, Thames Water struggles to remain in private ownership, the commission has recommended minimum financial requirements, like banks are subject to. This could mean utilities hold a certain amount of cash. It's hoped this will, in turn, make companies more appealing to potential investors. • The public health element of water has been recognised, and senior public health representation has been recommended for regional water planning authorities, as have new laws to address pollutants like forever chemicals and microplastics. • Fundamental reset of economic regulation - including changes to ensure companies are investing in and maintaining assets to help attract long-term, low-risk investment. A "supervisory" approach has been recommended to intervene before things like pollution occur, rather than penalising the businesses after the event. • Clear strategic direction - a long-term, 25-year national water strategy should be published by the UK and Welsh governments, with ministerial priorities given to water firms every five years. • Infrastructure and asset health reforms - companies should also be required to map and assess their assets and resilience. Nationalisation of the water industry was not in the Independent Water Commission's terms of reference and so was not considered. How has the report been received? In a speech responding to Sir Jon's report, Mr Reed is set to describe the water industry as "broken" and welcome the commission's recommendations to ensure "the failures of the past can never happen again". The water industry lobby group Water UK said "fundamental change has been long overdue". "These recommendations should establish the foundations to secure our water supplies, support economic growth and end sewage entering our rivers and seas," a spokesperson said. "The Independent Water Commission has written a comprehensive, detailed review of the whole sector, with many wide-ranging and ambitious recommendations. "Crucially, it is now up to government to decide which recommendations it will adopt, and in what way, but the commission's work marks a significant step forward." Campaign group Surfers Against Sewage said the report "utterly fails to prioritise public benefit over private profit". "This is not transformational reform, this is putting lipstick on a pig - and you can bet the champagne is flowing in water company boardrooms across the land," said its chief executive, Giles Bristow. "Only one path forward remains: a full, systemic transformation that ends the ruthless pursuit of profit and puts the public good at the heart of our water services," he said. "We welcome Sir Jon's calls for a national strategy, enshrining public health objectives in law and regional water planning. But we won't be taken for fools - abolishing Ofwat and replacing it with a shinier regulator won't stop sewage dumping or profiteering if the finance and ownership structures stay the same."
Yahoo
4 days ago
- Business
- Yahoo
Water regulation should be overhauled, review recommends
The system for regulating water companies should be overhauled and Ofwat replaced, a landmark review of the sector has advised. The much-anticipated final report from the Independent Water Commission, led by former Bank of England deputy governor Sir Jon Cunliffe, outlined 88 recommendations to the UK and Welsh governments to turn around the ailing industry. The Government-commissioned team was tasked to carry out the largest review of the sector since privatisation in the face of widespread public anger over pollution, bills and bosses' bonuses, although ministers ruled out nationalising water companies. Water minister Emma Hardy told broadcasters on Monday that the system is 'broken', but did not commit to how many of the 88 suggestions would be accepted by Whitehall. The report, published on Monday morning, recommended far-reaching changes to the way the water system is regulated as it called the current landscape 'fragmented and overlapping'. For England, proposals include abolishing Ofwat, which oversees how much water companies in England and Wales can charge for services, and the Drinking Water Inspectorate, which ensures that public water supplies are safe. The report also advises removing the regulatory roles of the Environment Agency and Natural England, which monitor the sector's impact on nature, such as companies illegally dumping sewage into waterways. Instead, a 'joined-up' and 'powerful' single integrated water regulator should be established, according to the recommendations. In Wales, Ofwat's economic responsibilities would be integrated into Natural Resources Wales, the review said. Ms Hardy told BBC Breakfast that ministers would be taking 'a proper look' at the paper 'all the way through the summer'. Asked if all the recommendations would be made law, she told the programme: 'What we'll do is we'll have a proper look at it all the way through the summer and the intention is that we're going to introduce a White Paper to spell out exactly what we're going to do on water reform.' Ms Hardy said that the Government would 'introduce a water Bill next year, which will change the law', but added: 'Exactly how many out of the 88 we're going to do or not going to do, then we'll work that out in the next few months.' The current system has faced intense criticism for overseeing water companies during the years they paid out shareholders and accrued large debts while ageing infrastructure crumbled and sewage spills skyrocketed. Author Sir Jon said the review has 'tried to attack the problem from all sides' but warned that bills are going to rise by 30% over the next five years. 'There are some inescapable facts here,' he said. 'The cost of producing water and dealing with our wastewater is going up.' Sir Jon later told Times Radio that regulators have failed to work together to make the sector deliver and blamed the Government for not giving clear direction. 'It's the failure of Government to balance out all the different pressures on water,' he said, adding that firms 'need to perform better' and 'be funded to invest'. The Government backed the commission's findings, with Ms Hardy saying consumers have been 'failed time and time again'. Speaking on Times Radio, she said 'root-and-branch reform' is needed to fix the crisis and told listeners the Government is considering a piece of primary legislation to deliver many of the proposed changes. Ms Hardy also described trust in the water industry as at 'the lowest ever level' and criticised executives for handing out pay rises and bonuses. 'Everyone knows the system is broken,' she said. 'And they give themselves huge pay rises.' However, the minister also ruled out supporting Government intervention to cap pay in the private sector. Ms Hardy said: 'I don't think as Government we should say what private companies should pay. 'But I will say – read the room. Look how angry and furious people are.' Other key recommendations in the review include: – Expanding the role of the voluntary Consumer Council for Water into an ombudsman to give stronger protection to customers and a clearer route to resolving complaints. – Significant improvements to environmental regulation, including the process where companies collect and analyse wastewater discharges they make into waterways, by introducing more digitalisation, automation, third-party assurance and inspections. – Tightening oversight of water company ownership and governance through measures such as new regulatory powers to block changes to water company ownership and 'minimum capital' requirements so that companies are less reliant on debt. – Introducing legislative reforms to better manage public health risks in water, recognising the many people who swim, surf and enjoy other water-based activities. – Fundamentally resetting economic regulation, including a new 'supervisory' approach that supports tailored decisions and earlier interventions in water company oversight.
The Independent
4 days ago
- Business
- The Independent
From scrapping Ofwat to mandatory meters – what does the landmark water review recommend?
A landmark review into the UK's water sector has recommended a major overhaul to the way water companies are regulated in the country, amongst many other changes. The critical and wide-reaching report from the Independent Water Commission outlined 88 recommendations to the UK and Welsh governments to turn around the ailing industry. Led by former Bank of England deputy governor Sir Jon Cunliffe, the review says that the current system is 'failing to deliver much of what society demands and expects, including for the economy.' The industry has faced criticism for seeing large sums of money paid out to shareholders while standards have dropped in the years since water companies were privatised. Campaigners have estimated that since 1989 – when companies were privatised – £85bn has been extracted from the water sector in dividends and other payouts to shareholders. The g overnment has said it backs the review and is considering a piece of primary legislation to deliver many of the proposed changes. Here are the key measures recommended in the report: Scrapping Ofwat to overhaul regulation The review recommends overhauling the regulators and replacing them with one body for England and one body for Wales. For England, this would see Ofwat and the Drinking Water Inspectorate abolished, and the removal of the environmental regulation functions for the Environment Agency and Natural England. Instead, a 'joined-up' and 'powerful' single integrated water regulator would be established. In Wales, Ofwat's economic responsibilities would be integrated into Natural Resources Wales, the review said. Setting up regional planning authorities Eight new regional water system planning authorities in England and one national authority in Wales should be set up, the review says. This would involve devolving current planning responsibilities and transferring resources from the regulators to these new authorities, which would be responsible for developing water investment plans that reflect local priorities and voices. Introducing stronger consumer protections The commission recommends measures such as expanding the role of the voluntary Consumer Council for Water into an ombudsman to give stronger protection to customers and a clearer route to resolving complaints. It also proposes the introduction of a national social tariff to provide consistent support for low-income customers who need help to pay their bills and to transfer responsibility for consumer advocacy to Citizens Advice. Stronger environmental regulations The report proposes stronger regulation on abstraction, sludge, drinking water standards and water supply. It also recommends improving the process where companies collect and analyse wastewater discharges they make into waterways by introducing more digitalisation, automation, third-party assurance and inspections. After one of the driest springs on record, it recommends compulsory water metering, changes to wholesale tariffs for industrial users and greater water reuse and rainwater harvesting schemes. Tightening oversight of water company ownership and governance The commission recommends new regulatory powers to block changes to water company ownership, for example, where investors are not seen to be prioritising the long-term interests of the company and its customers. It also suggests new 'public benefit' clauses in water company licences and recommends the regulator set 'minimum capital' requirements so that companies are less reliant on debt and more financially resilient. Public health reforms The report covers legislative reforms to better manage public health risks in water, recognising the many people who swim, surf and enjoy other water-based activities. These include public health objectives in water quality legislation, senior public health representation on regional water planning authorities and legislative changes to address emerging pollutants such as PFAs, also known as forever chemicals, micropollutants and microplastics. Fundamentally resetting economic regulation This recommendation includes a new 'supervisory' approach that supports tailored decisions and earlier interventions in water company oversight. The report also makes recommendations on the Price Review process, including changes to ensure companies are investing in and maintaining assets and to help attract long-term, low-risk investment. Providing a clear strategic direction The commission said both the UK and Welsh governments should publish a new long-term National Water Strategy with a minimum horizon of 25 years and interim milestones. It also says a set of ministerial priorities specifically for the water industry should be issued to regulators every five years, replacing the current strategic policy statement. Infrastructure and asset health reforms The report sets out changes in how water infrastructure is managed, monitored and delivered to better safeguard the provision of water and management of wastewater for future generations. They include new requirements for companies to map and assess their assets – such as pipes, treatment works and pumping stations. It also calls for resilience standards that are forward-looking and applied consistently across the industry.
