Water White Paper outlines reform framework for regulation, investment and delivery in England
The UK government has published A New Vision for Water, a White Paper setting out its proposals for reforming the water sector in England. Presented to Parliament by the Department for Environment, Food & Rural Affairs (Defra), the document outlines a package of intended regulatory, planning and investment changes, which the government characterises as a long-term response to structural challenges facing the English water sector.
The White Paper follows the Independent Water Commission, chaired by Sir Jon Cunliffe, and reflects the government’s assessment that existing arrangements in England have not provided sufficient clarity, stability or alignment across regulation, environmental protection, customer outcomes and long-term investment. It sets out areas where government intends to intervene, alongside measures it proposes to develop further through a future Transition Plan and primary legislation.
Proposed strategic reset and planning reform
A central theme of the White Paper is the government’s view that the water system in England lacks a clear, joined-up long-term direction. Defra argues that overlapping plans, short-term decision-making and fragmented responsibilities have increased regulatory burden while limiting effective delivery.
To address this, the government proposes to reform the way strategic direction is set for the English water sector. This includes replacing existing Strategic Policy Statements with expanded guidance covering the wider water system in England and setting priorities over a longer time horizon of up to 25 years. The White Paper states that this guidance would be refreshed every five years and is intended to inform future regulatory decisions, including the 2029 price review for English water companies.
The White Paper proposes consolidating existing water industry plans and processes into two core planning frameworks, one for water environment and one for water supply
In parallel, the government proposes to simplify planning requirements for water companies in England by consolidating existing plans and processes into two core frameworks: one for water supply and one for the water environment. These would be supported by a strengthened regional water planning function in England, which Defra suggests could provide a mechanism for aligning national objectives with regional and local priorities, while facilitating greater cross-sector coordination with agriculture, transport, development and local government.
The White Paper also indicates that government will explore the case for additional long-term environmental targets for water in England, noting that existing targets do not cover all pressures on the system.
Regulatory reform and the proposal for a single water regulator for England
The most significant institutional proposal in the White Paper is the creation of a single, integrated water regulator for England. Government concludes that the current regulatory landscape in England – involving Ofwat, the Environment Agency, Natural England and the Drinking Water Inspectorate – has resulted in overlapping remits and inconsistent incentives.
Under the proposals, Ofwat would be abolished for the purposes of water regulation in England, with relevant water-related functions from all four bodies brought together into a new regulator. This body would be tasked with overseeing economic regulation, environmental performance and public health protection for the English water sector in a more integrated manner.
A new regulator will bring together the water system functions from the existing regulators (Ofwat, the DWI, EA, and Natural England) into one new body
The government also proposes a shift in regulatory approach, away from a predominantly benchmarking-led model towards a more supervisory framework. This would involve company-specific oversight, ongoing engagement and earlier regulatory intervention where risks to performance, resilience or delivery are identified. The White Paper frames this approach as a way to improve understanding of company-specific circumstances, while retaining safeguards against abuse of monopoly power.
The document notes that the new regulator would operate within a framework of “constrained discretion”, with flexibility to focus on outcomes rather than processes, subject to statutory limits and principles of good regulatory practice. Leadership appointments are expected to be made during the transition period, while existing regulators would retain their existing water-related legal powers in England until the new body is established.
Investment, finance and delivery considerations in England
The White Paper places emphasis on the scale of investment required to maintain and upgrade water infrastructure in England. It references the £104 billion investment programme for England for the 2025–2030 period and cites estimates of substantially higher investment needs over the coming decades to maintain resilience and meet future demand.
Government confirms its intention to retain the five-year price review cycle for English water companies, while proposing reforms intended to provide greater longer-term visibility. These include introducing indicative funding horizons over 10 and 25 years, with price reviews acting as checkpoints within longer-term delivery plans rather than discrete delivery periods.
The document also proposes rationalising the existing incentive framework applied to English water companies, which government describes as complex and volatile, and signals further consideration of measures to support financial resilience, including engagement with companies and investors on capital structures and debt levels.
On delivery models, the White Paper proposes expanding the use of competitive procurement mechanisms within the English water sector. This includes amendments to the Specified Infrastructure Projects Regulations to allow broader application across water infrastructure in England. It also notes the potential role of green finance instruments, such as green bonds, which the government states it will continue to explore with regulators and investors.
Environmental performance, pollution control and next steps in England
Environmental performance is a recurring focus of the White Paper, particularly in relation to pollution affecting rivers, lakes and seas in England. The document reiterates existing commitments to significant investment in storm overflow improvements and wastewater treatment works in England, while signalling a policy shift towards prevention, including greater use of sustainable drainage, rainwater management and nature-based solutions.
The White Paper proposes consolidating agricultural pollution rules into a single national framework for England and increasing inspection and enforcement activity. It also states that operator self-monitoring of wastewater pollution incidents in England will be replaced with a more open monitoring approach, intended to improve transparency and public access to data.
A forthcoming Transition Plan is expected to set out how reforms would be sequenced and implemented
On water security, the document outlines proposals relating to asset health, leakage reduction, water reuse and new water resources in England, alongside statutory resilience standards and improved infrastructure planning. The government acknowledges that many of the proposals set out in the White Paper will require further development and legislation. A Transition Plan is expected to set out how reforms would be sequenced and implemented, while a future water reform bill for England would provide the legislative basis for structural changes.
Alongside the White Paper, government communications have pointed to how the proposed regulatory reforms could translate into more hands-on oversight in practice. This includes references to an “MOT-style” approach to infrastructure health checks and the use of no-notice inspections as part of a more proactive, supervisory regulatory model. In addition, smart metering is highlighted as a potential tool to support water efficiency and demand management, particularly at household level.
Water UK has described the White Paper as “a welcome step” but said the focus must now shift from diagnosis to delivery. The organisation argued that establishing the new water regulator, including appointing interim leadership, should be prioritised to avoid further long-term decisions being taken under existing arrangements.
Commenting on proposals highlighted in government communications, Water UK said an “MOT-style” approach to infrastructure oversight reflects customer expectations that problems should be prevented rather than explained after the fact, while stressing that effective diagnosis would need to be accompanied by clear plans for remediation and funding.
Taken together, the White Paper sets out the government’s proposed direction of travel for the water sector in England, rather than a completed reform package. Its implications for companies, regulators, investors and the supply chain will depend on how proposals are developed, consulted on and ultimately implemented over the coming years.