UK (Parliament Politics Magazine) – A major review by Sir Jon Cunliffe urges scrapping Ofwat and replacing it with a single regulator, as water bills are projected to rise 30% by 2030.
As reported by The Independent, an independent review has proposed replacing Ofwat with a single national regulator to tackle persistent failures in the water industry.
The Independent Water Commission’s final report urges ministers to scrap Ofwat and introduce a unified, stronger regulator to oversee the industry.
What did the report say about Ofwat?
Sir Jon Cunliffe, ex-deputy governor of the Bank of England, has slammed the UK’s water regulation system as “fragmented and overlapping” and called for it to be scrapped.
Among the 88 proposals, the significant is the call to scrap Ofwat and launch a unified, more powerful regulator to oversee the water industry.
The report also recommends removing the Environment Agency and Natural England from their oversight roles of water companies.
The commission also backed stronger consumer protections and proposed nine new regional water bodies to address local needs. It called for stricter environmental regulation and tighter checks on company ownership and government roles.
Under the proposal eight regional regulators in England and one in Wales would take over current planning duties. Regulator resources would be reallocated to strengthen local input and guide more efficient investment.
The final report comes after a nine-month process, which involved gathering over 50,000 submissions from the public and key stakeholders.
The report also outlines a roadmap for implementing reforms. It identifies which actions can be taken immediately and which require new legislation from Parliament.
What did Sir Jon Cunliffe say about soaring water bills?
Sir Jon Cunliffe said, “Bills are going to rise by 30% over the next five years. There are some inescapable facts here. The cost of producing water and dealing with our wastewater is going up. Climate change, higher environmental standards, demographic pressure, the population is going up. Just that need to renew ageing infrastructure.”
He stated, “The problem comes when you suddenly go from not investing for a long period, to massive investment, in order to catch up. That’s really what’s driven those huge bill increases that we’ve seen.”
Mr Cunliffe said,
“We need to help the most vulnerable, we also need to smooth that over a long period so that people can cope with the higher costs of water. And the regulators have a really important job in squeezing efficiency, incentivising the companies to be more efficient.”
He stated,
“Restoring trust has been central to our work. Trust that bills are fair, that regulation is effective, that water companies will act in the public interest and that investors can get a fair return.”
The former central bank governor said,
“Our recommendations to achieve this are significant. They include the management of the whole water system, regulation of the water industry, the governance and financial resilience of water companies and a stronger voice for local communities and water customers.”
He Stated,
“In this report I have considered what is best for the long-term future of water. This is a complex sector with a highly integrated system, responsible for the second-largest infrastructure programme in the UK.”
Mr Cunliffe added,
“Resetting this sector and restoring pride in the future of our waterways matters to us all. In countless conversations in the last nine months I have been struck by the urgent need and passion for change. Doing this will require hard work, strong leadership and sustained commitment. But it can and must be done.”
What did Steve Reed say about fixing the water crisis?
Environment Secretary Steve Reed declared Ofwat was “clearly underperforming,” indicating he may back proposals to dismantle the regulator.
He plans to launch a legally binding water ombudsman, giving more power to the Consumer Council for Water and bringing the sector in line with other utility regulators.
Mr Reed stated that sewage pollution in England’s rivers will be halved by 2030, supported by a £104 billion investment to upgrade the water system.
Duties of Ofwat
- Regulate water companies – Ensure fair pricing and reliable services for customers.
- Set price limits – Determine how much water companies can charge customers.
- Promote competition – Encourage efficiency and innovation in the water sector.
- Monitor environmental standards – Ensure sustainable water use and reduce pollution.