Water sector undergoes overhaul: Ofwat to be abolished
A landmark report published today by the Independent Water Commission has proposed a comprehensive overhaul of the water sector, aiming to address rising pollution incidents, improve public health protections, and restore trust in the industry. The report, led by Sir Jon Cunliffe, includes 88 recommendations as part of a 'fundamental reset' of the water sector.
The proposed changes include the establishment of nine new regional water authorities, which will devolve water system planning to local priorities and ensure accountability from all sectors impacting water. These authorities will be composed of representatives from local councils, public health, environment, agriculture, and consumers.
The report also recommends strengthening digitalisation and automation in water quality monitoring, as well as introducing a national social tariff to support low-income customers with water bills. Additionally, the report calls for stronger regulation on water abstraction, sludge management, drinking water standards, and water supply, including compulsory water metering and measures promoting water reuse and rainwater harvesting.
To enforce these changes, a new, single, powerful regulator will be established to cut water pollution in England's rivers. This unified regulatory approach aims to streamline governance, improve regulatory clarity, and enhance enforcement capacity. The existing regulator Ofwat will be abolished, and the new regulator will combine the functions of Ofwat, the Environment Agency, Natural England, and the Drinking Water Inspectorate. Compliance-related tasks such as permitting, monitoring, and enforcement will be under this new regulator's responsibility.
The report comes in response to growing public pressure for waterways and coasts to be preserved and restored. Last week, Surfers Against Sewage and 40 organisations, including the Clean Water Sports Alliance, wrote to the Prime Minister demanding an end to the sewage scandal through a 'systemic transformation' of the water industry.
The Government's response to the report and the proposed White Paper for a new Water Bill are expected later this year. Environment Secretary Steve Reed has stated that the new regulator will "stand firmly on the side of customers, investors, and the environment." However, whether the report will lead to 'systemic transformation' remains to be seen.
The number of pollution incidents by water companies in England increased by 60% in a year, with 2,801 incidents in 2024 compared to 2,174 in 2023. Rachel Dulai, British Rowing's Sustainability Lead, expressed the urgency of action regarding the rising pollution incidents. The Commission's failure to address the issue of water company ownership is seen by some as a missed opportunity.
The report also acknowledges the need for public health reforms to better manage public health risks in water. Many are waiting to see how far the Government is willing to go with reform, as indicated by the upcoming response and White Paper. The Government's commitment to preventing the abuses of the past and standing firmly on the side of customers, investors, and the environment is noted.
In summary, the report calls for a structural overhaul with regional planning authorities to localise water management, stronger digital and regulatory measures for pollution control and monitoring, greater consumer protections, and a new consolidated regulator to unify enforcement and oversight functions, ultimately aiming to restore trust and safeguard public health and the environment.
- The proposed regional water authorities will consist of representatives from local councils, public health, environment, agriculture, and consumers, aiming to devolve water system planning to local priorities and ensure accountability.
- The report recommends stronger regulation on water abstraction, sludge management, drinking water standards, and water supply, proposing compulsory water metering and measures promoting water reuse and rainwater harvesting.
- In an attempt to combat rising pollution incidents, a new, single, powerful regulator will be established to cut water pollution in England's rivers, with the expectation that this unified regulatory approach will streamline governance, improve regulatory clarity, and enhance enforcement capacity.
- The government's commitment to preventing past abuses, standing firmly on the side of customers, investors, and the environment is noted, as they are expected to respond to the report and propose a new Water Bill later this year.
- The report acknowledges the need for public health reforms to better manage public health risks in water, with many eagerly awaiting the extent of the government's commitment to these reforms as indicated by the upcoming response and White Paper.
