The UK Government has unveiled landmark reforms to overhaul the water industry following the publication of the long-awaited Independent Water Commission report, led by Sir Jon Cunliffe. The comprehensive review calls for a complete reset of how the sector is regulated, aiming to restore trust, improve infrastructure, and safeguard the environment and consumers.
One regulator to replace many
In the report, Sir Jon Cunliffe, former Deputy Governor of the Bank of England, has also proposed the creation of a single integrated water regulator to replace Ofwat, the Drinking Water Inspectorate, and parts of the Environment Agency and Natural England. This new body would oversee all aspects of water regulation in England, streamlining oversight and ensuring long-term accountability across the sector.
The proposed changes come amid public outrage over soaring bills and widespread sewage spills. Ofwat has been heavily criticised for enabling privatised companies to prioritise shareholder dividends over much-needed investment in infrastructure.
The report contains a staggering 88 recommendations over its 464 pages, and Sir Jon wrote in his forward, “There is no single, simple change, no matter how radical, that will reset the water sector and restore the trust that has been lost.”
In a speech following the report’s publication, Environment Secretary Steve Reed is expected to say:
“The water industry is broken. Our rivers, lakes and seas are polluted with record levels of sewage. Water pipes have been left to crumble into disrepair. Soaring water bills are straining family finances.
“Today’s final report from Sir Jon Cunliffe’s Independent Water Commission offers solutions to fix our broken regulatory system so the failures of the past can never happen again.
“The government will introduce root and branch reform in the biggest overhaul of water regulation in a generation.
“We are establishing a new partnership where water companies, investors, communities and the government will work together to clean up our rivers, lakes and seas for good.”
Customer protection and a new ombudsman
Alongside structural reform, the government will introduce a legally empowered water ombudsman, providing a single, free point of contact for customers facing issues such as leaks, incorrect bills, or poor service. This marks a significant change from the current voluntary framework and brings water sector complaints processes in line with those in the energy market.
Customers will also see tougher protections, including:
- Automatic compensation doubled when companies fail service standards.
- Ringfencing of customer bills, ensuring investment funds go to infrastructure – not executive bonuses.
- New powers to block takeovers or ownership changes not in the public interest.
Ambitious environmental commitments
Environment Secretary Steve Reed announced a suite of measures to clean up the nation’s waters and rebuild customer confidence. These include:
- A pledge to halve sewage pollution by 2030 and make rivers and seas the cleanest since records began.
- £104 billion investment to upgrade pipes and build new sewage treatment works – one of the largest infrastructure projects in UK history.
- A ban on wet wipes containing plastic, helping reduce microplastics.
- New legislation under the Water (Special Measures) Act banning unfair bonuses and threatening jail for law-breaking executives.
The plan also supports innovative approaches such as:
- Nature-based solutions like constructed wetlands to filter waste.
- Sustainable Drainage Systems (SuDS) in new developments to ease pressure on sewers.
Financial outlook and realities
Despite investment, water bills are projected to rise by 30% in real terms by 2030, according to Cunliffe. This reflects decades of underinvestment and the scale of the challenge to fix the sector’s failures. However, the reforms aim to ensure better value and transparency, with tighter controls and greater enforcement powers.