A new commission is to investigate Britain’s troubled water industry in a bid to tackle sewage pollution, “broken” infrastructure, and toughen up weak regulators.
The new Independent Water Commission will deliver the “largest review of the sector since privatisation”, the UK and Welsh governments said as they unveiled the plans.
Campaigners have warned against trade-offs between attracting investment, keeping bills affordable and protecting the environment.
It comes amid widespread anger at sewage-polluted waterways, water company bonuses and long-term failures to build new assets like reservoirs and sewers.
All 11 wastewater companies in England and Wales have this year been investigated by one of the public regulators, Ofwat, over mismanagement of their networks.
But the commission will also investigate how to reform the regulators themselves, amid concerns they lack resources and bite and have overseen private company profit despite record pollution levels.
It could even consider scrapping Ofwat and reforming the Environment Agency.
Water companies have been accused of underinvesting in new infrastructure while pocketing bonuses and shareholder payouts. Pic: PA
In December, water companies and the regulator will decide by how much to hike bills in order to fix some of these problems, with water firms on Tuesday requesting an even greater bill increase than had been expected.
Environment Secretary Steve Reed said: “Our waterways are polluted, and our water system urgently needs fixing.”
The water commission will “attract the investment we need to clean up our waterways and rebuild our broken water infrastructure”, he added.
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Mr Reed has ruled out renationalising the water industry to tackle pollution.
The new body will be chaired by former deputy governor of the Bank of England Sir Jon Cunliffe.
His findings, due in the second quarter of next year, will not be binding but inform further legislation to attract long-term investment and clean up the country’s filthy rivers and seas.
The Liberal Democrats, which has a base in rural constituencies and has made water issues a priority, said “more urgency” was needed.
Its environment spokesperson Tim Farron said: “Whilst a review of the industry is welcome, it should not be used as a tool to kick the can down the road on immediate reforms.”
The government should already be introducing “a new regulator with real teeth and power to get hold of these profiteering firms”, he said.
It follows earlier announcements by the new government to ringfence cash for infrastructure upgrades, and hike prison time and fines for polluting water company bosses.
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The government is concerned a lack of infrastructure is holding back growth, with lacking sewage or water infrastructure holding back new homes in Oxfordshire and Cambridge.
CEO of campaigning group River Action, James Wallace, called the steps “encouraging”.
But he warned, “water security and wildlife must not be sacrificed for growth and international investment”.
Greenpeace said the move was “long overdue” but needed to balance the demands of investors with a commitment to properly enforce environmental regulation.