A major independent review into the regulation of water companies across England and Wales has triggered calls for the abolition of Ofwat, the existing water regulator. The review, released on Monday, has outlined a sweeping overhaul of how the water sector is regulated amid deepening public frustration over pollution, soaring bills, and executive pay.
The final report, published by the Independent Water Commission and headed by Sir Jon Cunliffe, a former deputy governor at the Bank of England, makes a total of 88 recommendations targeting both the UK and Welsh governments. This inquiry is the most significant assessment of the water industry since its privatisation, and has been widely anticipated by both policymakers and communities affected by recurring infrastructure failures and high-profile sewage discharge incidents.
Tasked jointly by Westminster and the Welsh Government to analyse ongoing issues, the commission’s remit covered everything from regulation and company governance to infrastructure resilience and customer representation. The investigation involved months of research, gathering over 50,000 responses to a public call for evidence.
At the core of the report is a stark proposal: to replace Ofwat, along with the Drinking Water Inspectorate (DWI), by forming a new, unified water regulator in both England and Wales. The commission suggests removing the regulatory functions currently split between several agencies, including the Environment Agency and Natural England, instead placing oversight of the industry within a modernised, integrated body. The aim is to eliminate fragmentation and ensure stricter monitoring of company conduct and environmental impact.
The review has taken shape against a backdrop of public anger over declining service standards, mounting shareholder payouts, and chronic underinvestment in essential water infrastructure. Sewage spills and pollution have increased in frequency and scale, drawing criticism of regulators’ apparent inability to hold water companies to account. Ofwat, in particular, has been seen as ineffective in both controlling consumer bills and ensuring environmental protection.
Among the report’s other major proposals are calls for stronger advocacy for consumers, the creation of nine new regional water authorities to champion local priorities, cleaner and more robust environmental regulations, and increased scrutiny of company structure and finances. The commission also highlighted the urgent need for fairer bills, enhanced company transparency, and better protection of the natural environment.
Sir Jon Cunliffe stressed that “restoring trust” has guided the review’s recommendations. He stated, “Trust that bills are fair, that regulation is effective, that water companies act in the public interest and that investors can still get a fair return is critical. Resetting this sector and restoring pride in our waterways matters to everyone.” Cunliffe warned that ambition and long-term commitment will be required for these reforms to succeed, acknowledging the complexity of the water sector and the large infrastructure programme it oversees.
The publication of the review has prompted swift political reaction. Environment Secretary Steve Reed is expected to endorse many of the commission’s suggestions and support the formation of a new regulatory body—signalling a move to prevent previous regulatory failings being repeated. Mr Reed has previously committed to halving sewage spills by 2030, supported by substantial infrastructure investment, but is not anticipated to introduce expanded social tariffs that would help struggling households pay water bills, instead focusing on wider systemic reform.
The report’s release has reignited the debate over industry accountability. The Liberal Democrats, through leader Sir Ed Davey, have advocated for a powerful Clean Water Authority, equipped to levy fines and enforce environmental laws rigorously. Meanwhile, Conservative shadow ministers have called for transparency regarding what form the new regulator might take, with some accusing Labour of repackaging long-standing policy ideas.
As the government weighs the report’s recommendations, further steps could include a new legal ombudsman for water, and greater powers for the voluntary Consumer Council for Water. The intent is to bring the sector further into alignment with the accountability standards already seen in other essential utilities. What is clear is that the future of water regulation in England and Wales is poised for significant transformation, with the public, government, and industry stakeholders all firmly in the spotlight.