Water utility costs set to climb by 30% over the next decade, with possible implementation of mandatory water meters as well.
In a landmark move, an independent government commission has published a comprehensive report with 88 recommendations aimed at transforming the water sector in England and Wales. The report, which outlines significant reforms across regulation, water metering, customer protection, company oversight, environmental and infrastructure improvements, and long-term strategy, aims to address longstanding systemic issues while addressing environmental stresses and customer service.
The proposed changes include the abolition of the current financial regulator Ofwat in England and replacement with a new integrated regulator responsible for the entire water system. An independent economic regulator for Wales would also be established. The new regulator would have a clear purpose, be empowered to hold companies accountable, and help deliver better environmental, customer, economic, and financial outcomes.
One of the key recommendations is the introduction of compulsory water metering to promote water efficiency amid climate challenges. This move is expected to incentivize customers to use less water. The report also recommends changes to wholesale tariffs, particularly for industrial users, to incentivize water reuse and rainwater harvesting schemes.
To enhance customer protection, the report suggests upgrading the consumer body CCW into an Ombudsman for Water. This would offer stronger customer protections and clearer complaint resolution pathways. The responsibility for consumer advocacy would be transferred to Citizens Advice for improved support. The report also proposes the introduction of a national social tariff to ensure consistent financial support for low-income customers, reducing variation in assistance across regions.
Environmental and infrastructure reforms are a significant part of the report. Proposals include a radical overhaul of water system planning by devolving responsibilities to nine new regional water authorities. These authorities would reflect local priorities, including local councils, public health, environment, agriculture, and consumers. The report also outlines updated environmental legislation, including a new legally binding long-term target for the water environment.
The report warns that water bills could rise by an additional 30% in real terms over the next five years. Jon Cunliffe, who led the independent review, issued this caution. The report sets out proposals to improve affordability and customer service, including upgrading the Consumer Council for Water to an ombudsman.
The UK and Welsh governments are expected to respond formally and introduce legislation (Water Reform Bill) to implement these reforms soon. The report represents a significant overhaul aimed at fixing longstanding systemic issues while addressing environmental stresses and customer service.
- The new integrated regulator, replacing Ofwat, will have a clear purpose to hold water companies accountable and deliver better environmental, customer, economic, and financial outcomes.
- Compulsory water metering, recommended in the report, is aimed at promoting water efficiency and encouraging customers to use less water in light of climate challenges.
- To ensure consistent financial support for low-income customers across regions, the report proposes the introduction of a national social tariff.
- The proposed Water Reform Bill, expected from the UK and Welsh governments, will aim to implement significant reforms targeting longstanding systemic issues, environmental stresses, and customer service across the water sector, as outlined in the report.
