Water Sector Reform: First Steps

Steve Reed Excerpts

Thursday 18th July 2024 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)]

The new Government will never look the other way while water companies pump record levels of sewage into our rivers, lakes and seas. That is why we have outlined our immediate measures to begin the work to clean up our waterways.

First steps to clean up our rivers, lakes and seas

The Government have announced a series of initial steps towards ending the crisis in the water sector.

The new measures represent a step change to ensure the water industry cuts sewage dumping and attracts major private-sector investment to upgrade infrastructure while prioritising the interests of customers and the environment. The initial measures include:

Securing agreement from Ofwat that funding for vital infrastructure investment is ringfenced and can only be spent on upgrades benefiting customers and the environment. Ofwat will also 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 by changing 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.

Strengthening 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.

Water (Special Measures) Bill

Yesterday, the Government went further in the King’s Speech announcing the intention to introduce a new Bill to put water companies under special measures to strengthen regulation as a first step to clean up our rivers, lakes and seas.

The Water (Special Measures) Bill will:

Strengthen regulation to make water company executives criminally liable for severe failure.

Give the water regulator new powers to ban the payment of bonuses if environmental standards are not met.

Boost accountability for water executives through a new code of conduct for water companies, so customers can summon board members and hold executives to account.

Introduce new powers to bring automatic and severe fines.

Require water companies to install real-time monitors at every sewage outlet with data independently scrutinised by the water regulators.

These measures will strengthen the enforcement regime and make clear that the new Government will not tolerate poor performance across the water sector.

The Government will outline further legislation to fundamentally transform and reset our water industry and restore our rivers, lakes and seas to good health.

[HCWS3]