The biggest review of the water industry for almost four decades will be launched today after a series of scandals involving sewage dumping in Britain’s lakes and rivers.
A commission headed by former deputy governor of the Bank of England Sir Jon Cunliffe will be tasked with working out how to “fix Britain’s broken water industry” amid concerns that the regulator Ofwat is set to allow bills to be hiked to pay for repairs.
The commission, is a joint venture between the UK and Welsh governments, comes after Sir Keir Starmer’s government introduced legislation which will ban bonuses for water industry executives and potentially threaten jail with criminal charges for major leaks in the system.
But there is anger that the review will not look at taking failing water companies back into public ownership.
It follows a series of scandals which have seen sewage dumped in Lake Windermere, the Thames, the river Wye, in Kent and many iconic waterways across England and Wales.
Matthew Topham, lead campaigner at We Own It, said: "The review is deaf to the calls of the public, anti-sewage groups and the international community to wrestle with the root cause of the sewage crisis: privatisation.
"Without serious thought, this Labour government will be remembered for its re-privatisation of England's water system - repeating a failed experiment which has been studiously avoided the world over."
But environment secretary Steve Reed has promised an extensive overhaul.
He said: “Our waterways are polluted and our water system urgently needs fixing.
“That is why today we have launched a Water Commission to attract the investment we need to clean up our waterways and rebuild our broken water infrastructure.
“The Commission’s findings will help shape new legislation to reform the water sector so it properly serves the interests of customers and the environment.”
The commission will be tasked in working out how to attract the investment needed to clean up our waterways, speed up infrastructure delivery and restore public confidence in the sector as well as impose a tough new regulatory regime.
While the Labour government does not plan to reverse the privatisation of 1987 under Margaret Thatcher it will look for a complete overhaul of the system.
Sir Jon said: “I am looking forward to working with experts from across the water sector, from environment and customer groups and investors, to help deliver a water sector that works successfully for both customers, investors and our natural environment.”
The review is designed to tackle systemic problems and secure the infrastructure needed to meet future challenges, drive economic growth and clean up Britain's rivers, lakes and seas, the governments said.
Ministers say its recommendations, which will be handed to them in the second quarter of next year, will form the basis of further legislation to attract long-term investment and clean up the country's polluted waterways and coasts.
The move comes after years of underinvestment, a growing population and extreme weather caused by climate change have led to intense pressure on England's ageing water system, causing widespread flooding, supply issues, sewage pollution and leakages.
Public fury has swelled over the degraded state of the country's rivers, lakes and coastal waters and at a lack of investment in water infrastructure, rising bills, high dividends and debt and executive pay and bonuses at privatised water firms.
Fresh figures released by Ofwat on Tuesday showed water companies have asked to hike consumer bills by even more than they originally requested, despite attempts by the watchdog to curb bill increases.
The latest requests by water firms would see the average bill in England and Wales grow by 40 per cent by 2030, rising to £615 per year.
Many argue that they need to spend more on upgrading their pipes, sewers and reservoirs than originally planned.
Ofwat is due to make a final decision on bills increases on December 19, with companies going to the negotiating table with regulators between now and then.
Thames Water, the UK's biggest provider, which is in emergency talks over a £15 billion debt pile and a worsening financial situation, has asked for a 53 per cent rise.
David Black, chief executive at Ofwat said: "We welcome the Water Commission's review and look forward to being able to work with the Government on the change that is needed to drive better outcomes for customers and the environment.
"We are ready to back record investment, the challenge for water companies is to match that investment with the changes in company culture and performance that are essential to rebuilding the trust of customers and the public."
