Ofwat could be scrapped in water reforms

An autarkic reappraisal of the h2o manufacture is to urge sweeping changes to the mode the assemblage is managed, including the imaginable replacement of Ofwat with a strengthened assemblage combining economical and biology regulation.

Former Bank of England politician Sir Jon Cunliffe volition people the findings of the Independent Water Commission connected Monday, with stakeholders crossed the manufacture expecting important changes to regularisation to beryllium astatine its heart.

The existing regulator Ofwat has been nether occurrence from each sides successful caller years amid rising nationalist choler astatine levels of contamination and the fiscal absorption of h2o companies.

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Serious h2o contamination incidents successful England up 60% past year

Campaigners and politicians person accused Ofwat of failing to clasp h2o operators to account, portion the companies kick that its absorption connected keeping bills down has prevented due concern successful infrastructure.

In an interim report, published successful June, Sir Jon identified the beingness of aggregate regulators with overlapping responsibilities arsenic a cardinal contented facing the industry.

While Ofwat is the economical regulator, the Environment Agency has work for mounting contamination standards, alongside the Drinking Water Inspectorate.

Sir Jon's last study is expected to see a proposal that the authorities see a caller regulator that combines Ofwat's economical regulatory powers with the water-facing responsibilities presently managed by the EA.

In his interim study Sir Jon said options for betterment ranged from "rationalising" existing regularisation to "fundamental, structural options for integrating regulatory remits and functions".

He is understood to person discussed the implications of cardinal betterment with elder figures successful manufacture and authorities successful the past week arsenic helium finalised his report.

Environment Secretary Steve Reed is expected to motorboat a consultation connected the proposals pursuing work of the committee report.

The committee is besides expected to urge a "major shift" successful the exemplary of economical regulation, which presently relies connected econometric modelling, to a supervisory attack that takes much relationship of idiosyncratic institution circumstances.

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Sir Jon has said the h2o manufacture requires semipermanent strategical readying and stableness successful bid to marque it charismatic to "low-risk, low-return investors".

The h2o manufacture has agelong complained that the existent model, successful which companies are benchmarked against a notional exemplary operator, and penalised for failing to deed fiscal and biology standards, risks a "doom loop".

Thames Water, presently battling to implicit an equity process to debar falling into peculiar administration, has said the imposition of immense fines for failing to conscionable contamination standards is 1 of the reasons it is successful fiscal distress.

Publication of the Independent Commission study comes aft the Environment Agency published figures showing that superior contamination incidents increased by 60% successful 2024, and arsenic Thames Water imposes a hosepipe prohibition connected 15m customers.

Ofwat, Water UK and the Department for the Environment each declined to comment.