Latest news with #water industry
The Guardian
17 hours ago
- Business
- The Guardian
The Guardian view on the water industry: a return to public ownership should still be on the table
Labour could have chosen the public interest over the profit motive, as it set about its promised reorganisation of the water industry in England and Wales. Polling last year showed a higher level of support for publicly owned water companies than railways. Yet while train companies are being renationalised as contracts expire, ministers ruled out a reversal of 1989's water privatisation before they commissioned Sir Jon Cunliffe, a former central banker, to report on how they could improve this failing industry through tougher regulation. This newspaper regrets that the question of ownership was taken off the table. Water is among the most precious of all natural resources and the pro‑market logic for the sell-off was bogus. In the absence of competition, regional monopolies were created and, in the decades since, businesses have enriched themselves while failing to fulfil their responsibilities. No other European government has followed suit in offloading vital infrastructure including pipes and reservoirs, and enabling investors to extract wealth by loading up balance sheets with debt. Asking Sir Jon's commission to reconsider public ownership, alongside regulatory reform, would have offered more options. Growing pressure on the water supply, and increasing instability of hydrological cycles due to global heating, mean proper stewardship centred on human needs is more essential now than ever. It remains likely that Thames Water will end up in special administration due to its vast debt – despite this scenario having been left out of the commission's scope. The Common Wealth thinktank has proposed this as a stepping stone to long-term public control. Within the terms offered, Sir Jon has done a thorough piece of work. If they are accepted by ministers and work in the way he intends – and these are big ifs – his 88 recommendations ought to bring a shocking period of mismanagement to an end. But they probably won't prevent another from beginning. Not all of England and Wales's 11 regional water companies have the disgraceful records of Thames and Southern. The approach to pollution of these two businesses, combined with their aggressive financing structures, have undermined public confidence more deeply than all the rest. But tougher regulation is clearly overdue. The supervisory approach proposed, modelled on financial regulation, would be a significant improvement provided that the right people, including engineers, are put in charge. Rather than conduct statistical tick-box exercises, this new regulator should aim for an overview. Bringing under one new roof the various regulatory functions – including those carried out in the Department for Environment, Food and Rural Affairs, and by the little-known Drinking Water Inspectorate, as well as Ofwat – makes obvious sense. The rollout of smart meters is also a good proposal, provided that a social tariff is created for low-income households. An ombudsman ought to make it easier to seek redress when local services fail. It is right to highlight the need for a longer-term approach to water policy too. It remains to be seen which of these ideas will be taken forward. Businesses in multiple sectors are experts at running rings around regulators. Making water companies value the public interest more highly, relative to private profit, will be an ongoing struggle. Without structural reform, the cycle of regulatory failure and corporate evasion remains all too likely.
The Guardian
19 hours ago
- Politics
- The Guardian
The big stink: will new watchdog clean up our waterways?
Pippa Crerar and Kiran Stacey discuss the government's plans to overhaul the water industry. Will they be able to clean up the waterways of England and Wales and what could it mean for bills? Plus, what is Keir Starmer's latest move to help restore public trust in politics? And, as MPs break for summer, Pippa and Kiran hand out their end-of-year awards …
The Independent
a day ago
- Business
- The Independent
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.
BBC News
a day ago
- Business
- BBC News
Water industry review: Will these proposals make any difference?
A review of the water industry has proposed the biggest reform of the sector in England and Wales since privatisation more than 30 years review's author, Sir Jon Cunliffe, has made 88 recommendations, which range from scrapping the current regulator Ofwat to stronger introducing stronger environmental reforms are deep and wide, and come at a time when there has been widespread criticism of the industry over leaking pipes and sewage these proposals are adopted in full it would be hard to see how things could not get better than where the sector is now - underinvested and widely derided. Excessive debt and inappropriate dividends that threaten some water companies' resilience – such as Thames Water – would be addressed by minimum capital levels and powers to block ownership changes if not in the company's long-term already know that water companies will invest more than £100bn in upgrading systems over the next five years - and that bills will rise sharply to pay for Jon says there are some "inescapable facts", including climate change, higher environmental standards, a growing population, and replacing ageing problems plaguing the industry come from not investing for a long period, meaning there needs to be a "massive" investment, in order to catch up, he amount companies can invest is a function of what they are allowed to charge and for the last 20 years, bills have risen by less than inflation - so have been getting cheaper in real is widely accepted that Ofwat prioritised keeping bills low over new investment. If consumers want a better water system, someone has to pay for what the Environment Secretary Steve Reed wants - and Cunliffe suggests - is a way of making sure bills do not have to spike so dramatically in future to catch up for years of underinvestment - as we are seeing is paying the price for that by being the report there are continual references to the telecoms regulator Ofcom - which is seen to have done a better job by maintaining a focus on continual investment in better infrastructure over while you can change the regulator, the reality is that higher future bills are the price for fixing the underinvestment of the a lot to digest in this - including compulsory metering and public health officials on water planning bodies. It will take time to take effect. But at least the government will be able to point to the Cunliffe review and insist it has set the wheels of change in motion.
Telegraph
a day ago
- Politics
- Telegraph
Live Scrap Ofwat, major water review recommends
The water regulator should be abolished and replaced with a new single body covering England and Wales, a major review into the sector has urged. Sir Jon Cunliffe, who was tasked with leading the Independent Water Commission, has recommended 88 changes to the industry which he said was 'failing' customers. They included 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, published on Monday morning, recommended far-reaching changes to the way the water system is regulated as it found the current landscape 'fragmented and overlapping'. It also advised 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. Sir John also said that previous governments were partly to blame, telling Times Radio 'it's the failure of government to balance out all the different pressures on water'. Steve Reed, the environment secretary, will give a speech this morning promising that 'the failures of the past can never happen again'.
