The UK government has announced the “biggest overhaul of the water industry in England and Wales since privatisation”, introducing a raft of measures to tackle persistent problems such as pollution, leaks and water outages.
Environment Secretary Emma Reynolds said water companies will have “nowhere to hide” for poor performance, with new oversight mechanisms including company-specific teams to monitor and support individual firms, rather than a “one-size-fits-all” approach.
The reforms will also see the introduction of smart meters and mandatory water efficiency labels on appliances to help households monitor their usage and costs. A new chief engineer role will be created at the industry regulator, replacing Ofwat.
The changes come after a review by Sir John Cunliffe, who made 88 recommendations to improve the sector. However, he was not asked to consider renationalising the industry, which was privatised in the late 1980s.
Campaigners said the proposed reforms do not go far enough, with River Action chief executive James Wallace warning that “pollution for profit is the root cause of this crisis” and that the new regulator must be “truly independent” and properly funded.
Surfers Against Sewage described the government’s plans as “frankly insulting” and falling short of the “much needed structural reform” required. Sir Dieter Helm, professor of economic policy at Oxford University, suggested the government may be reluctant to explore nationalisation due to its own spending rules.
The announcement follows high-profile service disruptions, with tens of thousands of South East Water customers cut off for several days over the Christmas period. Consumer groups have called for a new, more powerful ombudsman service to give customers robust protection.
Peter Devery of the Angling Trust said the “proof will be in the river”, warning that if water quality does not improve across the country, the reforms will have failed. In 2024, water companies released raw sewage into England’s rivers and seas for a record 3.61 million hours.
The government says the reforms, alongside £104 billion of investment over the next five years, will help address long-standing issues of under-investment in the sector. However, critics argue that as long as the industry is structured to prioritise profit, the public will continue to pay the price.