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Policy

Government Backs Cunliffe Commission Call For A Super-Regulator - The Government immediately backed four reforms suggested by the Cunliffe Commission in its final report on the resetting the water sector. Minsters said they will:

• Create a new super-regulator for England, combining the functions of Ofwat and the Drinking Water Inspectorate with the water functions of the Environment Agency and Natural England. Wales will get a standalone regulator. Environment secretary Steve Reed was especially critical of Ofwat, which he said had failed customers and the environment. The Government position on regulation echoed the findings of a new Public Accounts Committee report , which accused the watchdogs of being “missing in action”. The PAC said: “The water system has been left to sink for too long, with hikes in customer bills now required to update and expand the failing infrastructure.” It called for urgent action to strengthen oversight, rebuild trust, explain what higher bills are being spent on and deploy fines on environmental remediation.

• Move to a catchment-based model for water system planning, so all water using and water discharging sectors can be considered together.

• Create a new statutory water ombudsman with legal powers to resolve customer complaints. The Consumer Council for Water (CCW) currently runs a voluntary ombudsman scheme. But as this is not binding, Defra said it “lacks any teeth and too often leaves customers with nowhere to go”.

• End ‘operator self-monitoring’ of water quality and pollutions. This will be replaced by open monitoring across the wastewater system, the data from which will be made publicly available online.

Reed told Parliament that a White Paper will be published in Autumn giving the Government’s full response to the Commission’s 88 recommendations, together with a consultation on the proposed changes and a transition plan for regulation. This will be followed up by a new Water Reform Bill. Cunliffe’s recommendations concerning the supply chain included:

• The regulator should conduct a sector-wide risk assessment of critical supply chain dependencies and assess infrastructure delivery needs assessment against supply chain capacity and workforce availability.

• Water companies, through Water UK, should share best practice on supplier contracts and procurement strategies to help improve water company relationships with the supply chain.

People

Ministers And Industry Pledge To Work Together On A Major Skills Drive - Ministers from Defra, the Department of Education and the Department for Work and Pensions (DWP) pledged at a Skills Summit hosted by Water UK to work with the water industry to support a major recruitment drive. The sector needs 43,000 new workers by 2030.

Environment secretary Steve Reed said: “We will work together to show people that a career in the water industry and its supply chain is something they can be proud of for a lifetime. Something that gives you new skills, exciting challenges and can set you up for life – wherever in this country you live. These are jobs that make a difference.”

Pensions minister Torsten Bell committed the DWP to support the water recruitment drive via its employment programmes, and skills minister Baroness Jacqui Smith explained how government strategies (including the Modern Industrial Strategy and Ten Year Infrastructure Strategy) and skills activities would work in tandem to help.

Water companies and the Government announced a package of actions to coincide with the Summit. This included Defra and DWP ministers signing the Water Skills Pledge, a Memorandum of Understanding outlining shared intent to collaborate on workforce development in the water sector and setting out the principles and commitments that will guide this partnership. Water companies committed to actions including offering up to 5,000 high-quality apprenticeship placements by 2030; helping over 100,000 ex-offenders, long-term unemployed and care leavers to join the sector; and launching an annual £25,000 National Watershot Prize to fund graduate research.

Reed signalled at the Summit that Government would now reset its relationship with the water sector, to support the successful delivery of £104bn of investment by 2030 in a bid to enable growth.

Pollution

Environment Secretary Pledges To Halve Spills By 2030  - Secretary of state Steve Reed has pledged to cut sewage spills by half by 2030 from a 2024 baseline and to halve phosphorus from treated wastewater by 2028. He said the Government’s water reform agenda had made this possible.

Shortly afterwards, the Office for Environmental Protection (OEP) announced that it has closed its investigation into the regulation of combined sewer overflows. This identified failures to comply with environmental law by Defra, the Environment Agency and Ofwat. However, the OEP said the Government’s response to the Cunliffe Commission showed “significant reforms are on the way” and that many actions to remedy the problems have already been taken.

• Professor Elizabeth Fisher and Caroline May have been appointed as non-executive directors of the Office for Environmental Protection, and Professor Dan Laffoley and Dr Paul Leinster CBE have been reappointed for second terms.

Environment Agency Reports Steep Rise In Serious Pollutions - Serious pollution incidents (category 1 and 2) rose by 60% from 47 to 75 between 2023 and 2024, according to a report published by the Environment Agency detailing pollution trends between 2016 and 2024.

81% of the 2024 number originated from three firms: Thames Water, Southern Water and Yorkshire Water. In stark contrast, Northumbrian Water and Wessex Water registered zero serious incidents last year. The Agency said serious incident numbers across the board had been “unacceptably high” throughout the period, and in 2024 were 32% higher than in 2016.

The all-incident (categories 1-3) number was up 29% from 2,174 in 2023 to 2,801 in 2024, with only South West Water seeing a drop from last year. More positively, 85% of incidents were self-reported in 2024, the highest rate ever.

Committee Calls For Holistic Strategy To Address Nitrogen Risk  - An inquiry into nitrogen pollution by the House of Lords Environment and Climate Change Committee has identified a piecemeal approach to nitrogen management and regulation across sectors. The Committee called for a holistic nitrogen strategy to be put in place within the next two years, to address emissions from agriculture, sewage, transport and industry.

Nitrogen: time to reduce, recycle, reuse , made separate recommendations for each sector. Regarding the wastewater sector, the Committee called for:

• Collaboration between wastewater and agriculture to implement upstream catchment-based and nature-based approaches, while exploring further opportunities for innovative waste management.

• Better monitoring and reporting of emissions to air and water from wastewater treatment plants, including nutrient loads from storm overflows. This should be teamed with nitrogen reduction targets to increase the accountability of stakeholders.

• Clarified roles and responsibilities for those involved in nutrient management in wastewater.

• Support for the expansion of nutrient recovery technologies.

Water Resources

Drought And Hosepipe Bans Affect Multiple Areas - Drought is now formally affecting four areas in England – the East and West Midlands, Yorkshire and the North West – with ‘prolonged dry weather’ status in many other places. June was hot and dry; reservoir levels continue to fall, with overall storage across England at 75.6%. Temporary Use Bans are in force in Kent and Sussex (South East Water); Swindon, Gloucestershire, Oxfordshire, Berkshire and Wiltshire (Thames Water); and Hampshire and the Isle of Wight (Southern Water).

In more positive news, two long term water resource schemes have had boosts. Defra has agreed to a request from Southern Water for the Thames to Southern Transfer project – a new underground drinking water transfer pipeline – to progress down the Development Consent Order path. And the High Court has dismissed a claim for judicial review against the construction of a new reservoir at Abingdon in Oxfordshire.

Planning

Planning Bill Amendments Please Environmental Interests - The Government has made a series of proposed amendments to the Planning and Infrastructure Bill which seek to address concerns that the environment would be harmed in pursuit of growth, and in particular how the new Nature Restoration Fund will operate.

These have been welcomed by nature groups and the Office for Environmental Protection (OEP). For instance, OEP chair Dame Glenys Stacey said: “While it is our view that, even after the material amendments the government proposes, the Bill would, in some respects, lower environmental protection on the face of the law, we think that, in the round, the additional safeguards proposed today make government’s intended ‘win-win’ for nature and the economy a more likely prospect.”

NISTA Launches Website Providing Major Project Visibility - The National Infrastructure and Service Transformation Authority (NISTA) has launched a new interactive Pipeline website setting out 780 major planned public and private infrastructure projects, worth £530bn over ten years. The aim is to give industry the clarity needed to plan for the long term and create good quality jobs and supply chain capacity necessary to deliver the government’s infrastructure ambitions and Plan for Change. This follows publication of the Ten Year Infrastructure Strategy.

Affordability

Authorities Look To Update WaterSure And GSS In Wales - Defra is consulting on extending access to the WaterSure scheme, which caps bills for low-income households on means-tested benefits who need to use high levels of water because they have either a qualifying medical condition or three or more children in the household. Bills are capped at the amount of the average household water and sewerage bill in the water company’s area.

The changes proposed include extending the list of qualifying medical conditions and benefits, introducing bill caps for single occupiers, and removing the option for water companies to require a medical practitioner’s note for health conditions not specifically listed in the WaterSure regulations. 

Separately, Ofwat is consulting on changes to the Guaranteed Standards Scheme in Wales , following its consultation for England. This sets minimum compensation levels for customers who experience certain service failures.