The much-anticipated final report from the Independent Water Commission has delivered 88 sweeping recommendations to transform Britain's struggling water industry. Led by former Bank of England deputy governor Sir Jon Cunliffe, the commission has outlined radical changes that could reshape how water services are regulated and delivered across England and Wales.
The Government has backed the review and is considering primary legislation to implement many of the proposed reforms. The comprehensive report addresses everything from regulatory overhaul to consumer protection and environmental standards.
Regulatory system faces complete overhaul
The review recommends abolishing the current regulatory framework and replacing it with streamlined bodies. For England, this would mean scrapping Ofwat and the Drinking Water Inspectorate, whilst removing environmental regulation functions from the Environment Agency and Natural England.
Instead, a single integrated water regulator would be established to provide "joined-up" and "powerful" oversight. In Wales, Ofwat's economic responsibilities would be transferred to Natural Resources Wales, creating a more cohesive regulatory approach.
Regional planning authorities proposed
Eight new regional water system planning authorities would be created in England, with one national authority for Wales. These bodies would take over current planning responsibilities and receive transferred resources from existing regulators.
The new authorities would develop water investment plans reflecting local priorities and community voices. This represents a significant shift towards decentralised decision-making in water infrastructure planning.
Consumer protections strengthened significantly
The commission proposes expanding the Consumer Council for Water into a full ombudsman service. This would give customers stronger protection and clearer routes for resolving complaints with water companies.
A national social tariff would provide consistent support for low-income customers struggling with bills. The report also recommends transferring consumer advocacy responsibilities to Citizens Advice, creating a more robust support network.
Environmental regulations tightened considerably
Stronger regulation on abstraction, sludge, drinking water standards and water supply forms a key pillar of the recommendations. The report calls for improved monitoring of wastewater discharges through digitalisation, automation and third-party inspections.
Following one of the driest springs on record, compulsory water metering is recommended alongside changes to wholesale tariffs for industrial users. Greater water reuse and rainwater harvesting schemes would help address supply challenges.
Company ownership faces stricter oversight
New regulatory powers would allow authorities to block changes to water company ownership where investors fail to prioritise long-term customer interests. The commission suggests introducing "public benefit" clauses in company licences to ensure accountability.
Minimum capital requirements would reduce companies' reliance on debt and improve financial resilience. This addresses concerns about highly leveraged water companies struggling to invest in infrastructure improvements.
Public health reforms address emerging threats
Legislative reforms would better manage public health risks for people swimming, surfing and enjoying water-based activities. The report recognises the growing importance of recreational water use across Britain.
Public health objectives would be embedded in water quality legislation, with senior representation on regional planning authorities. New measures would tackle emerging pollutants including PFAs, micropollutants and microplastics.
Economic regulation fundamentally reset
A new "supervisory" approach would support tailored decisions and earlier interventions in company oversight. The Price Review process would be reformed to ensure companies invest properly in maintaining assets.
Changes would help attract long-term, low-risk investment to the sector. This addresses industry concerns about securing funding for essential infrastructure upgrades and maintenance programmes.
Strategic direction clarified long-term
Both UK and Welsh governments would publish new long-term National Water Strategies with minimum 25-year horizons and interim milestones. This would provide clearer direction for industry planning and investment decisions.
Ministerial priorities specifically for the water industry would be issued every five years, replacing current strategic policy statements. This would ensure regular updates reflecting changing priorities and challenges.
Infrastructure management transformed completely
The report outlines fundamental changes to how water infrastructure is managed, monitored and delivered for future generations. New requirements would force companies to map and assess all assets including pipes, treatment works and pumping stations.
Forward-looking resilience standards would be applied consistently across the industry. This addresses concerns about ageing infrastructure and the need for climate-resilient water systems.
(PA) Note: This article has been edited with the help of Artificial Intelligence.
