Latest news with #Jon Cunliffe
The Independent
17 hours ago
- Business
- The Independent
Government prepares for release of landmark review into ailing water sector
The Government is bracing for the release of a landmark review into the water industry, which could reportedly lead to the abolition of embattled water regulator Ofwat. The Independent Water Commission, led by former Bank of England deputy governor Sir Jon Cunliffe, will outline recommendations to turn around the floundering sector in its final report on Monday. The review was commissioned by the UK and Welsh governments as part of their response to systemic industry failures, which include rising bills, record sewage spills and debt-ridden company finances, although ministers have ruled out nationalising companies. The Government will respond to the recommendations in Parliament later on Monday. The review reportedly includes proposals to establish a new system of regulation, which is currently split between Ofwat, the Environment Agency and the Drinking Water Inspectorate. Ministers will announce a consultation that could lead to axing Ofwat, which oversees how much water companies in England and Wales can charge for services, according to the Guardian. Ofwat has faced intense criticism for overseeing water companies during the years that they paid shareholders and accrued large debts while ageing infrastructure crumbled and sewage spills skyrocketed. In an interview with the Sunday Times, Environment Secretary Steve Reed suggested he was in favour of a new model where regional boards managed water in their areas, including representatives from water companies, local authorities and other organisations. He said: 'I think the catchment-based model has a lot to commend it. Because if you can manage what's going into the water better, you can clean up the water faster.' Asked on Friday if there were plans to scrap Ofwat as the regulator, Downing Street said the Government will wait for a final report. A No 10 spokesman said: 'We are waiting for Sir Jon Cunliffe's final report next week, you can expect us to set out our response after that on what more we will do to turn the sector around.' A Government spokesperson said: 'We are not going to comment on speculation.' Ofwat declined to comment. Mr Reed is also expected to announce a new Government pledge to halve sewage pollution from water companies by the end of the decade, during broadcast interviews on Sunday. He said: ' Families have watched their local rivers, coastlines and lakes suffer from record levels of pollution. 'My pledge to you: the Government will halve sewage pollution from water companies by the end of the decade.' But in his Sunday Times interview, he acknowledged that bills were unlikely to fall from their current level, saying instead that an investment of £104 billion in the sector would 'avoid the need for any big bill hikes in the future'. It comes after the Environment Agency on Friday said the number of serious pollution incidents caused by water companies across England rose by 60% in 2024 compared with the previous year. The figures showed companies recorded a total of 2,801 pollution incidents, up from 2,174 in 2023. Of these, 75 were categorised as posing 'serious or persistent' harm to wildlife and human health – up from 47 last year. The Environment Agency said it is clear some companies are failing to meet the targets it has set on pollution, attributing failures to persistent underinvestment in new infrastructure, poor asset maintenance and reduced resilience because of the impacts of climate change. Earlier on Friday, the Public Accounts Committee also released a report which called the level of pollution 'woeful' and recommended an overhaul of the regulation system. The cross-party group of MPs said the Government must act with urgency to strengthen oversight of the sector to rebuild trust and ensure its poor performance improves. The Independent Water Commission published its interim report in June, which found the sector to be beset with 'deep-rooted, systemic' failures. While the paper outlined the commission's direction of travel, it stopped short of providing detailed recommendations on policy, regulatory reform and corporate governance, which are now expected in the final report. The interim review pointed to the need for better regulation of water companies but it did not recommend the wholesale scrapping of Ofwat, which some have urged. Nationalisation, which some campaigners have also called for, was excluded from its terms of reference when commissioned by the Government. Meanwhile, the Conservatives accused Labour of copying the previous government's policies and doing nothing to halt rises in water bills. Shadow environment secretary Victoria Atkins said the Government should be 'transparent' about where the money to fix Britain's sewers was coming from, warning that consumers may have to stump up some of the cash. She added: 'Labour's water plans must also include credible proposals to improve the water system's resilience to droughts, without placing an additional burden on bill payers and taxpayers.'
Malay Mail
a day ago
- Business
- Malay Mail
‘Extremely stressed': Thames Water warns of collapse without overhaul of UK water rules
Proposed measures to fix sector expected on Monday Indebted Thames Water fighting for survival Regulation overhaul could be proposed LONDON, July 19 — Britain is expected to set out measures to fix its broken water sector on Monday as Thames Water teeters on the brink of failure, saying it needs a 'reset' of regulation to have any chance of avoiding nationalisation. The country's biggest water company has been fighting for its survival for the last 18 months. If it fails the government would have to step in, adding billions of pounds to already stretched public finances. Britain commissioned a review last year into the privatised water industry in England and Wales, which needs huge investments to fix aging infrastructure and stem sewage spills into rivers and lakes that have angered the public. Former Bank of England deputy governor Jon Cunliffe, who is leading the review, has recommended overhauling regulation to lower investment risk, merging regulators to give companies clearer direction and new rules on river bathing standards. 'Water companies must be made more attractive to stable, long-term investors,' he said in his interim report in June. 'To attract such long-term investors, willing to make the substantial future investment we need, risks also need to be lower than they are presently. In large part, this means restoring confidence in the stability and predictability of the regulatory system.' Thames Water's creditors have offered it a rescue deal worth about 5 billion pounds (RM28.5 billion), and they, along with the beleaguered company, are in talks with Ofwat, the water industry's financial regulator. But in return they want a regulatory reset, which could mean flexibility on pollution targets, clemency on penalties and more time to deliver improvements. Thames Water Chief Executive Chris Weston told lawmakers on Tuesday that the company was 'extremely stressed and operating in very difficult circumstances' after it reported a 1.65 billion pound annual loss. Thames Water suffered a major setback in June when US private equity firm KKR – its preferred bidder – pulled out of an earlier rescue plan. KKR told lawmakers in a letter published on Tuesday that regulatory risk played a part in its decision, and it would not have been 'able to manage and meet the understandable expectations on the timing of improvements, risking falling short in the eyes of the public and stakeholders'. Thames Water, which has 16 million customers in southern England, forecasts it will face 1.4 billion pounds in pollution fines and penalties over the next five years. While the government wants to cut water pollution, it can ill afford a Thames Water bankruptcy that would add the company's 17 billion pound debt onto government books, at a time when the finance minister Rachel Reeves is already close to breaking her fiscal rules. The government has repeatedly said it is keeping a close eye on Thames Water. Environment minister Steve Reed said in June that his department had 'stepped up' preparations for its special administration regime, a form of temporary nationalisation. — Reuters
Zawya
2 days ago
- Business
- Zawya
UK to set out water reforms as Thames Water faces crisis
LONDON - Britain is expected to set out measures to fix its broken water sector on Monday as Thames Water teeters on the brink of failure, saying it needs a "reset" of regulation to have any chance of avoiding nationalisation. The country's biggest water company has been fighting for its survival for the last 18 months. If it fails the government would have to step in, adding billions of pounds to already stretched public finances. Britain commissioned a review last year into the privatised water industry in England and Wales, which needs huge investments to fix aging infrastructure and stem sewage spills into rivers and lakes that have angered the public. Former Bank of England deputy governor Jon Cunliffe, who is leading the review, has recommended overhauling regulation to lower investment risk, merging regulators to give companies clearer direction and new rules on river bathing standards. "Water companies must be made more attractive to stable, long-term investors," Cunliffe said in his interim report in June, adding that the sector required more predictable regulation. Launching the review last October, environment minister Steve Reed said there had been "very severe failures of regulation", raising the prospect that Ofwat, the water industry's financial regulator, could be scrapped. Thames Water's creditors have offered it a rescue deal worth about 5 billion pounds ($6.7 billion), and they, along with Thames Water, are in talks with Ofwat. But in return they want a regulatory reset, which could mean flexibility on pollution targets, clemency on penalties and more time to deliver improvements. Data released on Friday showed the scale of the sewage problem in England, with serious pollution incidents up 60% in 2024 compared to the previous year. Thames Water was responsible for 44% of the most serious incidents, the Environment Agency said, but all nine companies showed "consistently poor performance". Thames Water Chief Executive Chris Weston told lawmakers on Tuesday that the company was "extremely stressed and operating in very difficult circumstances" after it reported a 1.65 billion pound annual loss. Thames Water suffered a setback in June when U.S. private equity firm KKR - its preferred bidder - pulled out of an earlier rescue plan. KKR told lawmakers in a letter published on Tuesday that regulatory risk played a part in its decision, and it would not have been "able to manage and meet the understandable expectations on the timing of improvements, risking falling short in the eyes of the public and stakeholders". Thames Water, which has 16 million customers in southern England, forecasts it will face 1.4 billion pounds in pollution fines and penalties over the next five years. While the government wants to cut water pollution, it can ill afford a Thames Water bankruptcy that would add the company's 17 billion pound debt onto government books, at a time when finance minister Rachel Reeves is already close to breaking her fiscal rules. The government has repeatedly said it is keeping a close eye on Thames Water. Environment minister Steve Reed said in June that his department had "stepped up" preparations for its special administration regime, a form of temporary nationalisation. ($1 = 0.7466 pounds)
Reuters
2 days ago
- Business
- Reuters
UK to set out water reforms as Thames Water faces crisis
LONDON, July 18 (Reuters) - Britain is expected to set out measures to fix its broken water sector on Monday as Thames Water teeters on the brink of failure, saying it needs a "reset" of regulation to have any chance of avoiding nationalisation. The country's biggest water company has been fighting for its survival for the last 18 months. If it fails the government would have to step in, adding billions of pounds to already stretched public finances. Britain commissioned a review last year into the privatised water industry in England and Wales, which needs huge investments to fix aging infrastructure and stem sewage spills into rivers and lakes that have angered the public. Former Bank of England deputy governor Jon Cunliffe, who is leading the review, has recommended overhauling regulation to lower investment risk, merging regulators to give companies clearer direction and new rules on river bathing standards. "Water companies must be made more attractive to stable, long-term investors," he said in his interim report in June. "To attract such long-term investors, willing to make the substantial future investment we need, risks also need to be lower than they are presently. In large part, this means restoring confidence in the stability and predictability of the regulatory system." Thames Water's creditors have offered it a rescue deal worth about 5 billion pounds ($6.7 billion), and they, along with the beleaguered company, are in talks with Ofwat, the water industry's financial regulator. But in return they want a regulatory reset, which could mean flexibility on pollution targets, clemency on penalties and more time to deliver improvements. Thames Water Chief Executive Chris Weston told lawmakers on Tuesday that the company was "extremely stressed and operating in very difficult circumstances" after it reported a 1.65 billion pound annual loss. Thames Water suffered a major setback in June when U.S. private equity firm KKR (KKR.N), opens new tab - its preferred bidder - pulled out of an earlier rescue plan. KKR told lawmakers in a letter published on Tuesday that regulatory risk played a part in its decision, and it would not have been "able to manage and meet the understandable expectations on the timing of improvements, risking falling short in the eyes of the public and stakeholders". Thames Water, which has 16 million customers in southern England, forecasts it will face 1.4 billion pounds in pollution fines and penalties over the next five years. While the government wants to cut water pollution, it can ill afford a Thames Water bankruptcy that would add the company's 17 billion pound debt onto government books, at a time when the finance minister Rachel Reeves is already close to breaking her fiscal rules. The government has repeatedly said it is keeping a close eye on Thames Water. Environment minister Steve Reed said in June that his department had "stepped up" preparations for its special administration regime, a form of temporary nationalisation. ($1 = 0.7466 pounds)
