Government announces first steps to reform water sector


Secretary of State for Environment Food and Rural Affairs Steve Reed has today (11 July 2024) announced a series of initial steps towards ending the crisis in the water sector.

As Ofwat publishes its draft responses on water company spending, the new measures represent a step change after years of failure to ensure the water industry cuts illegal sewage dumping and attracts major private-sector investment to upgrade infrastructure while prioritising the interests of customers and the environment.

This afternoon the Secretary of State will also meet with water company Chief Executives to make clear that under this government water companies will be answerable for their performance for customers and the environment. He will set out his plans to work in partnership with the sector and investors to attract investment, jobs, and clean up the nation’s polluted waterways.

He has today announced:

  • He has written to Ofwat to ask them to make sure funding for vital infrastructure investment is ringfenced and can only be spent on upgrades benefiting customers and the environment. He also wants Ofwat to ensure that when money for investment is not spent, companies refund customers, with money never allowed to be diverted for bonuses, dividends or salary increases.
  • Water companies will place customers and the environment at the heart of their objectives. The Secretary of State is clear that he expects companies to change their ‘Articles of Association’ – the rules governing each company – to make the interests of customers and the environment a primary objective.
  • Consumers will gain new powers to hold water company bosses to account through powerful new customer panels. For the first time in history, customers will have the power to summon board members and hold water executives to account.
  • Strengthened protection and compensation for households and businesses when their basic water services are affected. Subject to consultation, the amount of compensation customers are legally entitled to when key standards are not met will more than double. The payments will also be triggered by a wider set of circumstances including Boil Water Notices.

Secretary of State for Environment, Food and Rural Affairs, Steve Reed said:

We will never look the other way while water companies pump sewage into our rivers, lakes and seas.

This unacceptable destruction of our waterways should never have been allowed, but change has now begun so it can never happen again.

Today I have announced significant steps to clean up the water industry to cut sewage pollution, protect customers and attract investment to upgrade its crumbling infrastructure.

That change will take time. Over the coming weeks and months, this Government will outline further steps to reform the water sector and restore our rivers, lakes and seas to good health.

These steps sit alongside the Government’s manifesto commitments to put failing water companies under tough special measures to clean up our waterways.