A new report by the Independent Water Commission has called for the most comprehensive overhaul of the UK water sector since its privatisation. The 67-page summary outlines 88 recommendations aimed at delivering a fundamental “reset” of the system, citing a need to rebuild public trust, attract critical investment, and prepare for future environmental and population pressures.
The Commission argues that the water sector must move beyond its current state, emphasizing the need for clean, safe water not only for drinking but also for recreation and environmental stewardship. “A reset is needed to restore public confidence in the sector and its regulation, to attract the investment needed to clean up the waterways of England and Wales, and to establish a framework that will meet the water demands of the future,” the report states.
At the core of the proposed reforms is the creation of single integrated water regulators in both England and Wales. In England, this new regulator would consolidate Ofwat, the Drinking Water Inspectorate, and relevant functions from the Environment Agency and Natural England. In Wales, Ofwat’s economic duties would be transferred into Natural Resources Wales. The Commission argues that a unified body would address the current fragmented and overlapping regulatory structure, provide a clearer “whole-firm” view of water companies, and give investors greater confidence.
“A powerful, single regulator for water would simplify the system, reduce duplication, close regulatory gaps and ensure a much stronger ‘whole-firm’ view of each company,” the report notes, adding that the model draws on lessons from regulators like Ofcom.
The report also proposes the creation of eight new regional water system planning authorities in England and a national one in Wales. These bodies would take over water investment planning, directing funds, and holding to account not only water companies but all sectors that impact water systems. Local voices would play a more prominent role, with strategic boards including representation from local councils, public health, agriculture, environmental groups, and consumers.
“There is a ‘missing middle,’” the report explains, highlighting the gap between national strategy and local delivery. These regional planners would be designed to bridge that divide, streamline planning processes, and act as single points of engagement in their areas.
Other major recommendations include:
- Greater consumer protection, including upgrading the Consumer Council for Water (CCW) into an independent Ombudsman for Water and establishing a national social tariff to offer consistent bill support for low-income households.
- Stronger environmental regulation, with emphasis on digitisation, tighter controls on water abstraction and sludge, mandatory water metering, and reforms to outdated environmental laws. A new legally binding long-term target for water quality is also proposed.
- Tighter oversight of water company ownership, including new powers for the regulator to block ownership changes and introduce “public benefit” clauses in company licences. Minimum capital requirements are recommended to improve financial resilience.
- Public health protections, with new legislative objectives for recreation and water quality, and reforms targeting pollutants like PFAS and microplastics.
- Infrastructure and asset health reforms, including mandatory mapping and assessment of company assets and consistent, forward-looking resilience standards.
- A fundamental reset of economic regulation, featuring a move to a supervisory model that allows for tailored oversight and earlier interventions in company performance.
To provide clear long-term direction, the Commission recommends that both the UK and Welsh governments publish National Water Strategies with 25-year horizons and 5- and 10-year milestones. These would replace the current Strategic Policy Statements and ensure consistency across planning, regulation, and investment.
Sir Jon Cunliffe, who chaired the Commission, said: “Restoring trust has been central to our work. 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.
“Resetting this sector and restoring pride in the future of our waterways matters to us all. 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.”
In response, industry trade body Water UK described the report as a turning point. “Everyone agrees the system has not been working. Today is a major moment and this fundamental change has been long overdue. These recommendations should establish the foundations to secure our water supplies, support economic growth and end sewage entering our rivers and seas.”
