The UK government announced on Monday it will overhaul how the country’s water system is managed and regulated, following a damning report that exposed deep-rooted failings in the privatised sector.
The long-awaited reform comes amid widespread public anger over persistent leaks, sewage discharges into rivers and seas, and mounting criticism of the regulator, Ofwat.
“Our water industry is broken,” said Environment Secretary Steve Reed. In response to the scathing findings of the Independent Water Commission, the government will scrap Ofwat and establish a single, powerful regulator responsible for overseeing the entire sector.
According to Reed, the new watchdog will “stand firmly on the side of customers, investors and the environment,” and prevent a repeat of past abuses.
Since its privatisation in 1989, the water industry has been plagued by underinvestment, spiralling customer bills, and growing debt. Once debt-free, the sector is now burdened with tens of billions of pounds, much of which critics say has funded executive bonuses and shareholder dividends instead of infrastructure upgrades.
On Sunday, reports revealed that serious contamination incidents in England had soared by 60% in the past year. In response, the government pledged to halve sewage pollution from water companies by 2030.
Jon Cunliffe, who leads the Independent Water Commission, said on Times Radio: “The water industry, the system of regulation, and even how we manage our rivers and waterways — it’s all failing.”
The commission’s 67-page summary, published with 88 recommendations, criticised the current regulatory framework as “complex and unintelligible,” saying it has clearly failed to drive meaningful infrastructure improvement.
The report urged both the UK and Welsh governments to assume stronger powers to directly intervene in underperforming water firms and to comprehensively reform the system of oversight.
Privatised under Margaret Thatcher’s Conservative government, the water industry now faces renewed scrutiny over its financial structure and long-term sustainability.
Water campaigner and former pop star Feargal Sharkey voiced scepticism over the proposed reforms. Speaking to the BBC, he said successive governments had “lost control of this industry” and accused officials of bowing to corporate interests.
“At the heart of this debacle lies corporate greed, financial engineering, and excessive executive salaries,” he said. “We were promised a root-and-branch review, including ownership and structure. We were promised champagne — all we’ve got is sour milk.”