Latest news with #waterregulation
Times
2 days ago
- Politics
- Times
Let the great water clean-up begin
C all this a 'Great Stink' moment? Back in 1858, it proved the cue for Joseph Bazalgette's 1,100 miles of sewers and pumping stations that transformed the health of London. This time all we've got is a 464-page report, overflowing with 88 recommendations, that even its author likened to a 'Russian novel'. All the same, Sir Jon Cunliffe has done us a favour. Maybe no one really needed such a lengthy treatise to spot that when it comes to water regulation the nation has long been up the creek without a paddle — or that scrapping Ofwat is overdue. Yet it's useful to see it spelt out so forensically. And with no truck, either, for the old Labour politics of environment secretary Steve Reed: a chap far too focused on sideshow stuff, such as bans on directors' bonuses, rather than a systemic fix for the problem. Cunliffe, a former Bank of England deputy governor, was clear that, given the job ahead, bills will have to rise and companies be able to pay for 'the best people'.
The Independent
2 days ago
- Business
- The Independent
Key questions answered on water reforms to protect consumers and environment
The Government has backed the recommendation by an independent commission to abolish water regulator Ofwat as part of a shake-up of the sector. Here are some key questions answered. – What is the problem? There has been growing anger about the state of the privatised water industry. Pollution in England's rivers, coasts and lakes, hikes to bills, shareholder dividends and bosses' bonuses, along with the well-publicised financial woes of the biggest water firm Thames Water, have led to calls for action to tackle what the Government and others have labelled a 'broken' sector. There is also the looming issue of future water supplies in the face of climate change which is bringing more extreme weather. That means a rising risk of drought like the one currently gripping swathes of England and leading to restrictions on supplies for millions of people, heatwaves which push up demand and intense downpours which overwhelm water and sewage systems. Climate change, along with a growing population and historic underinvestment in water infrastructure such as reservoirs, are putting pressure on future supplies and the natural environment. – How does the water system work in England and Wales? It is a 'regulated monopoly' in which a series of private water companies in England are responsible for supplying households in their area with drinking water and/or removing and treating sewage. Ofwat regulates the financial conduct and health of the water firms, while the Drinking Water Inspectorate ensures water supplies are safe for consumers, and the Environment Agency and to a lesser extent Natural England regulate environmental issues around water. Ofwat is also the economic regulator for water companies in Wales, which is mostly supplied by not-for-profit Welsh Water. Unlike with energy companies, you cannot change your water company, so there is no competition between the firms. Instead a five-yearly system known as the 'price review' involves water companies putting in proposals to economic regulator Ofwat on how much they can charge on bills and what they will deliver in return. The regulator determines a final settlement – which can then be contested by the firms and ruled on by the Competition and Markets Authority (CMA). – What was the Independent Water Commission? With the new Government's postbag on environmental issues dominated by concerns over water, ministers launched an independent water commission led by Sir Jon Cunliffe, former deputy governor of the Bank of England, to conduct a wholesale review of the water sector. But the terms of reference excluded renationalising the industry. – Why not renationalise water services? Many countries have publicly-owned water services, and some campaigners see it as the only way to ensure that public interest is favoured over private profits. They complain that the owners of water companies have loaded them with debt and paid out large profits to shareholders over the years since privatisation, while putting insufficient investment into infrastructure and hiking bills. But ministers have insisted that renationalising the sector is not the answer, with Environment Secretary Steve Reed warning it would cost £100 billion and slow down efforts to curb pollution as efforts to return them to public ownership would be snarled up in legal wrangles. – What did the review say? It made 88 recommendations, with key ones including a recommendation to overhaul the sector's regulators and replace them with one body for England and one body for Wales. For England, this would see Ofwat and the Drinking Water Inspectorate abolished, and the removal of the environmental regulation functions for the Environment Agency and Natural England. It also recommends measures such as expanding the role of the voluntary Consumer Council for Water into an ombudsman to give stronger protection to customers and a clearer route to resolving complaints, and the introduction of a national social tariff. And on the environment, it calls for stronger regulation on abstraction, sludge, drinking water standards and water supply, improving the process where companies collect and analyse wastewater discharges and compulsory water metering and greater water reuse and rainwater harvesting schemes. Sir Jon has warned that all the issues outlined in the report need to be addressed to solve the fundamental problem with the sector. – What is the Government doing now? Environment Secretary Steve Reed has already announced abolishing Ofwat and rolling the four separate regulators into a 'single, powerful' body acting on behalf of customers, investors and the environment, in one of five recommendations the Government will fast-track. He has also pledged to halve pollution from the water sector by 2030, a higher target than previously, albeit from a higher baseline of 2024 compared to the previous start date of 2021. And he said the Government would be consulting on all 88 different recommendations in Sir Jon's report, as well as pointing to securing £104 billion in investment from water companies and more powers to the regulator. – Will it be enough? Mr Reed has said the reforms will protect customers from the kind of bill hikes seen this year, attract investment into the sector and clean up rivers, lakes and seas. Water UK, which represents water companies, welcomed the review's recommendations, saying they would 'establish the foundations to secure our water supplies, support economic growth and end sewage entering our rivers and seas'. But critics continue to call for more fundamental reform, including nationalising companies such as heavily-indebted Thames Water, battling to secure funding to shore up its creaking finances and responsible for major pollution incidents. River Action chief executive James Wallace accused the commission of falling short, leaving 'the current failed privatised water company model intact.' And Richard Benwell, a member of the Independent Water Commission's expert advisory group and chief executive of Wildlife and Countryside Link, said reforms would 'fall short' without proper funding and a clear steer from Government.
Yahoo
2 days ago
- Business
- Yahoo
Key questions answered on water reforms to protect consumers and environment
The Government has backed the recommendation by an independent commission to abolish water regulator Ofwat as part of a shake-up of the sector. Here are some key questions answered. – What is the problem? There has been growing anger about the state of the privatised water industry. Pollution in England's rivers, coasts and lakes, hikes to bills, shareholder dividends and bosses' bonuses, along with the well-publicised financial woes of the biggest water firm Thames Water, have led to calls for action to tackle what the Government and others have labelled a 'broken' sector. There is also the looming issue of future water supplies in the face of climate change which is bringing more extreme weather. That means a rising risk of drought like the one currently gripping swathes of England and leading to restrictions on supplies for millions of people, heatwaves which push up demand and intense downpours which overwhelm water and sewage systems. Climate change, along with a growing population and historic underinvestment in water infrastructure such as reservoirs, are putting pressure on future supplies and the natural environment. – How does the water system work in England and Wales? It is a 'regulated monopoly' in which a series of private water companies in England are responsible for supplying households in their area with drinking water and/or removing and treating sewage. Ofwat regulates the financial conduct and health of the water firms, while the Drinking Water Inspectorate ensures water supplies are safe for consumers, and the Environment Agency and to a lesser extent Natural England regulate environmental issues around water. Ofwat is also the economic regulator for water companies in Wales, which is mostly supplied by not-for-profit Welsh Water. Unlike with energy companies, you cannot change your water company, so there is no competition between the firms. Instead a five-yearly system known as the 'price review' involves water companies putting in proposals to economic regulator Ofwat on how much they can charge on bills and what they will deliver in return. The regulator determines a final settlement – which can then be contested by the firms and ruled on by the Competition and Markets Authority (CMA). – What was the Independent Water Commission? With the new Government's postbag on environmental issues dominated by concerns over water, ministers launched an independent water commission led by Sir Jon Cunliffe, former deputy governor of the Bank of England, to conduct a wholesale review of the water sector. But the terms of reference excluded renationalising the industry. – Why not renationalise water services? Many countries have publicly-owned water services, and some campaigners see it as the only way to ensure that public interest is favoured over private profits. They complain that the owners of water companies have loaded them with debt and paid out large profits to shareholders over the years since privatisation, while putting insufficient investment into infrastructure and hiking bills. But ministers have insisted that renationalising the sector is not the answer, with Environment Secretary Steve Reed warning it would cost £100 billion and slow down efforts to curb pollution as efforts to return them to public ownership would be snarled up in legal wrangles. – What did the review say? It made 88 recommendations, with key ones including a recommendation to overhaul the sector's regulators and replace them with one body for England and one body for Wales. For England, this would see Ofwat and the Drinking Water Inspectorate abolished, and the removal of the environmental regulation functions for the Environment Agency and Natural England. It also recommends measures such as expanding the role of the voluntary Consumer Council for Water into an ombudsman to give stronger protection to customers and a clearer route to resolving complaints, and the introduction of a national social tariff. And on the environment, it calls for stronger regulation on abstraction, sludge, drinking water standards and water supply, improving the process where companies collect and analyse wastewater discharges and compulsory water metering and greater water reuse and rainwater harvesting schemes. Sir Jon has warned that all the issues outlined in the report need to be addressed to solve the fundamental problem with the sector. – What is the Government doing now? Environment Secretary Steve Reed has already announced abolishing Ofwat and rolling the four separate regulators into a 'single, powerful' body acting on behalf of customers, investors and the environment, in one of five recommendations the Government will fast-track. He has also pledged to halve pollution from the water sector by 2030, a higher target than previously, albeit from a higher baseline of 2024 compared to the previous start date of 2021. And he said the Government would be consulting on all 88 different recommendations in Sir Jon's report, as well as pointing to securing £104 billion in investment from water companies and more powers to the regulator. – Will it be enough? Mr Reed has said the reforms will protect customers from the kind of bill hikes seen this year, attract investment into the sector and clean up rivers, lakes and seas. Water UK, which represents water companies, welcomed the review's recommendations, saying they would 'establish the foundations to secure our water supplies, support economic growth and end sewage entering our rivers and seas'. But critics continue to call for more fundamental reform, including nationalising companies such as heavily-indebted Thames Water, battling to secure funding to shore up its creaking finances and responsible for major pollution incidents. River Action chief executive James Wallace accused the commission of falling short, leaving 'the current failed privatised water company model intact.' And Richard Benwell, a member of the Independent Water Commission's expert advisory group and chief executive of Wildlife and Countryside Link, said reforms would 'fall short' without proper funding and a clear steer from Government.
BBC News
2 days ago
- Politics
- BBC News
Devon and Cornwall campaigners' mixed response to water overhaul
Environmental campaigners and industry stakeholders have given mixed responses to the government's announcement that water regulator Ofwat will be scrapped and Secretary Steve Reed said the overhaul, which follows an independent review, would "prevent the abuses of the past" and bring together fragmented oversight into a more accountable Pearson from water cleanliness advocates Friends of the Dart cautiously welcomed the move, calling the proposed ombudsman "a powerful tool for change."Campaign group, Cornwall-based Surfers Against Sewage (SAS), condemned the report as insufficient and cosmetic, claiming it was "putting lipstick on a pig". New water ombudsman will tackle leaks and overchargingFive key takeaways from the landmark water sector reviewWill the water industry proposals make any difference?Water bills will 'never again' jump as high, claims minister The Water Commission review, led by former Bank of England deputy governor Sir Jon Cunliffe, was set up in response to growing public concern about sewage spills and rising Pearson said: "We often hear people complaining that South West Water are effectively marking their own homework at the moment."She believes sustained investment and government-backed enforcement and needed for significant improvements to river health."What we need to see is not just identifying the problems, but consistent action towards resolving them," she said. "We need the right thing to be done, and we need it to be done methodically and with a long-term view." 'Taken for fools' Giles Bristow, chief executive of SAS, said the review "utterly fails to prioritise public benefit over private profit". "Only one path forward remains: a full, systemic transformation that ends the ruthless pursuit of profit and puts the public good at the heart of our water services," he the group welcomed the call for a national strategy, Mr Bristow dismissed the regulator overhaul as said: "We won't be taken for fools. Abolishing Ofwat and replacing it with a shinier regulator won't stop sewage dumping or profiteering if the finance and ownership structures stay the same." South West Water said it welcomed the report "and its focus on shaping a stronger water sector for the future"."The proposals outlined today reflect the importance of long-term strategic planning, local accountability, and better environmental and public health outcomes," it said."We are particularly supportive of efforts to update regulation, strengthen asset health, and introduce clearer national direction through a long-term water strategy." Analysis from BBC South West environment correspondent Kirk England "From sea swimmers to clean water campaigners, many will be hoping that Sir Jon Cunliffe's review will lead to change, particularly on tackling sewage spills."About a third of England's designated bathing waters are here in the South West."In 2024, although the overall number of spills by South West Water dropped slightly, to 56,000, the duration of those spills rose to 544,000 hours, up from 531,000 in 2023."South West Water has welcomed the publication of the Independent Water Commission's final report and has already said it is investing to tackle sewage discharges."But there are fears the proposed measures don't go far enough and will not lead to what so many people have told me they want to see - a significant and sustained reduction in sewage discharges into rivers and the sea."
The Independent
2 days ago
- Business
- The Independent
‘Never again': Regulatory reform pledged to prevent repeat of water bill hikes
The Environment Secretary has said households will 'never again' face major water bill hikes as he announced an overhaul of regulation of the troubled sector. Steve Reed announced in a speech alongside the River Thames that regulator Ofwat would be scrapped, as part of measures to pull overlapping water regulation by four different bodies into one 'single powerful' regulator responsible for the whole sector. He made the announcement in response to an independent review by Sir Jon Cunliffe which called for the move, as one of 88 measures to tackle problems in the water sector. The review was commissioned by the Government to answer public fury over pollution in rivers, lakes and seas, soaring bills, shareholder payouts and bosses' bonuses. Mr Reed pledged the new regulator would 'stand firmly on the side of customers, investors and the environment', as he said the Government would cut sewage pollution by half by 2030 – based on a new, higher baseline of pollution in 2024 compared with previous targets relating to 2021. And it would oversee maintenance and investment in water infrastructure so that 'hard-working British families are never again hit by the shocking bill hikes we saw last year'. Questioned by journalists after the speech about future bill hikes, Mr Reed insisted it was 'absolutely the intention' that the reforms would ensure there was adequate investment in the long term to prevent the kind of 30% increase seen in customer water bills last year at the next price review in five years. He also accused the Tories of failing to ensure sufficient investment in crumbling pipes and infrastructure that would have prevented the recent hikes. But in a separate speech, review author Sir Jon warned that costs and bills are likely to continue to rise, as he recommended the Government introduce a national social tariff to help households struggling to pay. 'The cost of producing water and wastewater services is likely to increase over the medium and longer term as the industry has to replace ageing assets, respond to higher environmental and public health standards and continue to adapt to the challenges of population growth and climate change,' he said. 'And against that likely background of rising costs and rising bills, there is a need for a stronger safety net for the most vulnerable when exposed to water poverty.' Asked if investor returns will need to rise to attract the capital needed and contribute to bill hikes, Sir Jon said: 'All the investors I talked to said we are happy to accept a lower return … if you can give us lower risk on the downside. 'Bills will have to reflect what investors need, the equity they need. 'That is part of the cost of building the infrastructure that we need but at the same time, a regulator needs to continue to maintain pressure and efficiency.' Sir Jon's review did not explore renationalising water companies; ministers have refused to entertain the possibility despite demands from campaigners to return them to public ownership. Mr Reed warned nationalisation would cost £100 billion and slow down efforts to cut pollution. He said it was not the answer, adding: 'The problems are to do with governance and regulation, and we are fixing those problems so we can fix the problem of sewage pollution and unacceptable bill hikes in the fastest time possible.' The reforms would see a single regulator replace Ofwat and take in functions related to the water sector from the Environment Agency, which currently investigates pollution incidents and licenses water abstraction from the environment, as well as the Drinking Water Inspectorate and Natural England. Sir Jon suggested a new water regulator would take two years to set up after looking at the time frame for setting up Ofcom, the communications regulator, in the early 2000s. The process could involve bringing the different organisations together as one before integrating the staff and working out where there may be duplication or gaps. Sir Jon also said the Government will have to tackle the issue of securing a 'very high level of leadership', adding that the current system does not have the skills and expertise that will be needed in the new set-up. Asked if ministers need to carry forward all of his 88 recommendations to ensure a full reset of the sector, he said: 'I don't think you're going to solve the fundamental problem unless you tackle all of those issues. 'I think you can get improvement on all those dimensions, but I do think you need to address it all in order to move us to a different place.'
