Major change means water companies have ‘nowhere to cover’ after disasters
Water companies will be left with ‘nowhere to hide’ as ministers unveil major plans to overhaul the industry after years of soaring bills, supply issues and sewage pollution
Major plans have been unveiled to overhaul the industry after years of soaring bills, supply issues and sewage pollution(Image: Greg Martin)
Water companies will be left with “nowhere to hide” as ministers unveil major plans to overhaul the industry after years of soaring bills, supply issues and sewage pollution.
In the biggest reforms for decades, water firms will be required to carry out an ‘MOT’ on infrastructure like the condition of pipes and pumps to prevent crises spiralling out of control.
The Government last year announced that water regulator Ofwat would be scrapped and replaced to overhaul the “broken” system. The Water White Paper, published on Tuesday, will set out clear powers for a new single watchdog that will aim to boost accountability. Four different bodies currently overlap in oversight of the water industry.
Environment Secretary Emma Reynolds said: “These are once-in-a-generation reforms for our water system – tough oversight, real accountability, and no more excuses.
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“Water companies will have nowhere to hide from poor performance, customers will get the service they deserve, and investors will see a system built for the future. This builds on the tough action we’ve already delivered, from record investment to banning unfair bonuses.”
The Department for Environment, Food and Rural Affairs (Defra) said dedicated supervisory teams for each water company will replace Ofwat’s current one-size-fits-all approach. The new watchdog will also be able to conduct “no notice” inspections to help prevent the kind of disruption that has affected communities across South East England in recent weeks.
Thousands of homes in Kent and Sussex have been suffering water supply issues after South East Water’s pipes bursting in cold weather. At the height of the crisis, the firm said some 30,000 customers were either without water, or had low water pressure.
Elsewhere, under the plans, a chief engineer will sit inside the new water regulator so that firms “are not marking their own homework”.
Where companies fall short, a new Performance Improvement Regime will give the regulator the power “to act fast and fix failures” so that underperforming water companies recover quickly, protecting customers and the environment.
A new Water Ombudsman will have legally binding powers to resolve customer complaints. Defra said it will mean companies will face tougher requirements to respond quickly and compensate fairly when things do go wrong.
The Government has already introduced criminal liability for water bosses who cover up illegal sewage spills, and the power to ban unfair bonuses, with £4million in bonuses blocked last summer. Ministers will introduce a new water reform bill to bring forward the legislation needed.
They said the plans are backed by £104billion of private investment over the next five years, including £11bn to improve around 2,500 storm overflows and nearly £5bn to upgrade wastewater treatment works.
Currently, Ofwat oversees how much water companies in England and Wales can charge for services; the Drinking Water Inspectorate ensures that public water supplies are safe; while the Environment Agency and Natural England have regulatory functions to monitor firms’ impact on nature.
Mike Keil, chief executive of the Consumer Council for Water, said: “Closer and more thorough scrutiny of how companies are maintaining their networks would be a welcome step to rebuilding consumer trust, which is at an all-time low.” But Tim Farron, environment spokesman for the Liberal Democrats, said the White Paper “does not go far enough to guarantee the fundamental regulatory reform that was promised”.
James Wallace, chief executive of River Action, said many of the measures announced are “welcome steps”, but warned that “major gaps remain” in areas such as triggers for special administration and more ambition to tackle agricultural pollution. “The publication of the Water White Paper signals the Government recognises the scale of the freshwater emergency, but lacks the urgency and bold reform to tackle it,” he said.
Chris Walters, Ofwat interim CEO, said: “We welcome the government’s White Paper and its direction for the future of the water sector. The creation of a new water regulator for England will bring a renewed focus, improve the sector for customers, investors and the environment, and rebuild trust.”
