Ofwat is poised to be scrapped and substituted with a "single, powerful regulator" designed to tackle water pollution and shield households from escalating bills, the government has announced.
The Department for Environment, Food and Rural Affairs (Defra) has revealed that Ofwat's English operations will be consolidated with the Environment Agency, Natural England and the Drinking Water Inspectorate, bundling water regulation under one authority, as reported by .
Labour ministers will also collaborate with the Welsh government to devolve water regulation.
Environment secretary Steve Reed declared the reforms as urgent, branding the water industry as "broken."
"In the biggest overhaul of water regulation in a generation, we will bring water functions from four different regulators into one," Reed said.
"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 the government, the sector and investors to attract billions of pounds of new investment."
The government stated that injecting £104bn into upgrading infrastructure and constructing sewage treatment facilities whilst customer bills have been protected for investment in schemes. Additional initiatives, including prohibiting wet wipes containing plastic and threatening law-breaking bosses with imprisonment, have been highlighted as steps designed to improve rivers and lakes across England.
Earlier on Monday, an examination of the º£½ÇÊÓƵ's beleaguered water sector suggested Ofwat should be abolished as part of a major regulatory transformation.
Sir Jon Cunliffe, the former Bank of England deputy governor, advocated for a unified regulator across England and Wales to guarantee private firms operate in the "public as well as private interest."
Cunliffe's study presents 88 proposals designed to rebuild public confidence in water companies following soaring charges and widespread sewage spillages.
The modifications represent the most substantial reforms since privatisation in 1989.
"Restoring trust has been central to our work," Sir Jon said on Monday.
"Trust that bills are fair, that regulation is effective, that water companies will act in the public interest and that investors can get a fair return."
"Our recommendations to achieve this are significant. They include the management of the whole water system, regulation of the water industry, the governance and financial resilience of water companies and a stronger voice for local communities and water customers."
The Cunliffe review also suggests enhanced safeguards for customers, including transforming the Consumer Council for Water into an Ombudsman for Water and moving consumer advocacy responsibilities to Citizens Advice. This would be paired with a nationwide social tariff to tackle "widely different levels of support" across the nation.
Cunliffe calls for Ofwat reset
º£½ÇÊÓƵ water firms face intense examination following years of infrastructure underinvestment, excessive shareholder payouts and escalating pollution episodes.
Thames Water, Britain's largest water provider, confronts potential temporary state control whilst grappling with debts exceeding £16bn.
Ofwat has previously sanctioned substantial bill increases to fund infrastructure and operational enhancements, with companies poised to invest approximately £104bn during the forthcoming five years.
Amongst Cunliffe's additional proposals are compulsory water metering and establishing eight new water sector planning bodies in England to accelerate the.
The report proposes a fresh unified regulator to supersede current water watchdogs, compulsory water metering, and a social tariff for vulnerable consumers.
Cunliffe advocated for establishing eight new regional water system planning bodies in England and one in Wales, to simplify the planning procedure.
His review also pressed for "stricter supervision" of water company ownership, including fresh regulatory powers that would prevent ownership changes where investors haven't prioritised customers' "long-term interests."
"Resetting this sector and restoring pride in the future of our waterways matters to us all," Sir Jon stated. "In countless conversations in the last nine months I have been struck by the urgent need and passion for change. Doing this will require hard work, strong leadership and sustained commitment. But it can and must be done."
