THE GOVERNMENT is set to scrap water regulator Ofwat following a major review of the water sector, ministers have announced.
Environment Secretary Steve Reed announced late on Sunday night that it would be looking to dismantle Ofwat as the overseer of water companies and the regulator of the privatised water and sewage sector.
It is to be replaced by a new ombudsman which will cover both England and Wales, and would also replace both the Drinking Water Inspectorate and the parts of the Environment Agency and Natural England which deal with water and the environment.
It comes after a report published by the Independent Water Commission in June which explained its interim findings–including responses from over 50,000 members of the public.
In the report it said that regulators had failed in their role in keeping water companies in check, recommending a more streamlined solution.
Nearly 90 recommendations were made in total, which would culminate to the most sweeping changes to the water sector since its privatisation in the late 1980s.
They also included devolvement of planning to eight local authorities in England, which would feature better consumer protection and environmental powers as well as reform in infrastructure and public health.
Those conducting the report were banned from considering the renationalisation of the sector, however – a move which has been called for from a number of organisations.
It comes amid growing criticism of water companies’ management of infrastructure, rising debts and costs, and continued negative impacts on the environment as a result of poor infrastructure.
Thames Water has come under particular fire as the biggest water company in the UK, which has debts of around £20 billion and continues to face the threat of collapse into temporary nationalisation.
Ministers have said that the government will review the report over the coming months and come to a decision as to which of the 88 recommendations it will adopt, with a new Water Bill due next year.
Five of the recommendations were prioritised and confirmed today (Monday, July 21), however.
Mr Reed said during the announcement: “In the biggest overhaul of water regulation in a generation, we will bring water functions from four different regulators into one.
“A single, powerful regulator responsible for the entire water sector will stand firmly on the side of customers, investors and the environment and prevent the abuses of the past.
“It will provide the clarity and direction required for a strong partnership between Government, the sector and investors to attract billions of pounds of new investment.”
