Government launches water sector commission

23rd October 2024

The Government has launched a new commission set up by the Department for Environment, Food and Rural Affairs (Defra) to explore how water companies in England could work better. The review could see water companies banned from making a profit under plans for a complete overhaul of the system.

The Commission forms the next stage in the Government’s long-term approach to ensuring we have a sufficiently robust and stable regulatory framework to attract the investment needed to clean up our waterways, speed up infrastructure delivery and restore public confidence in the sector.

It follows the Government’s inaugural International Investment Summit last week at which the Prime Minister spoke of the need for regulation and regulators to support growth and investment in the UK.

Launched by the UK and Welsh governments, the Commission will report back next year with recommendations to the Government on how to tackle inherited systemic issues in the water sector to restore our rivers, lakes and seas to good health, meet the challenges of the future and drive economic growth.

Former Deputy Governor of the Bank of England, Jon Cunliffe, will Chair the Commission. With several decades of economic and regulatory experience, his appointment demonstrates the Government’s serious ambitions.

The Commission will draw upon a panel of experts from across the regulatory, environment, health, engineering, customer, investor and economic sectors. It forms part of the Government’s reset of the water sector by establishing a new partnership between government, water companies, customers, investors, and all those who enjoy our waters and work to protect our environment.

Launching the review, Secretary of State Steve Reed said “Our waterways are polluted and our water system urgently needs fixing. That is why today we have launched a Water Commission to attract the investment we need to clean up our waterways and rebuild our broken water infrastructure.

“The Commission’s findings will help shape new legislation to reform the water sector so it properly serves the interests of customers and the environment.”

Water Commission Chair Sir Jon Cunliffe said “I’m honoured to be appointed as chair of the government’s new Water Commission. It is vital we deliver a better system to attract stable investment and speed up the building of water infrastructure.

“Working over many years in the public sector, in environment, transport and the Treasury, and the Bank of England, I have seen how the regulation of private firms can be fundamental to incentivising performance and innovation, securing resilience and delivering public policy objectives.

“I am looking forward to working with experts from across the water sector, from environment and customer groups and investors, to help deliver a water sector that works successfully for both customers, investors and our natural environment.”

Joanna Elson CBE, Chief Executive of Independent Age, said “We welcome the announcement from Environment Secretary Steve Reed that the Water Commission will have a focus on the interests of vulnerable customers and water bills affordability, something that is incredibly important for older people on a low income.  

“Our latest polling found that almost a quarter of people aged over 65 in England are worried about paying their water bill in the next six months1.  Callers to our helpline tell us they are cutting back on water by washing less, and others say they are reducing other costs like food just to be able to turn the tap on.  

“While the future focus of the Commission is welcome, older people in financial hardship need reassurance that they will be protected from increasing water costs this winter. We are calling on the UK Government to implement a single social tariff for water as soon as possible to ensure everyone can afford their water bills, but given this will take some months to implement, and with the threat of higher bills on the horizon, short-term action is also needed.”