“Interlocking failures” in the water sector across England and Wales can be fixed through fundamental reform in five key areas, according to a major interim report.
The Independent Water Commission, established last year and led by a former deputy governor of the Bank of England, was scathing of government and regulatory oversight of the industry – long blighted by criticism over performance, particularly over sewage spills, shareholder payouts and bonuses for bosses.
Money latest: Change to mortgage rules could drive up house prices
Sir Jon Cunliffe said: “There is no simple, single change, no matter how radical, that will deliver the fundamental reset that is needed for the water sector.
“We have heard of deep-rooted, systemic and interlocking failures over the years – failure in government’s strategy and planning for the future, failure in regulation to protect both the billpayer and the environment and failure by some water companies and their owners to act in the public, as well as their private, interest.
“My view is that all of these issues need to be tackled to rebuild public trust and make the system fit for the future. We anticipate that this will require new legislation.”
The commission, which is due to make its final recommendations later in the summer, failed to rule out the creation of a super regulator to bring oversight into alignment.
Rachel Reeves threatens to sue Roman Abramovich over Chelsea FC sale proceeds
Ex-BT chief Patterson sounded out about £300m Waves Audio float
Money blog: ‘I’m selling my second home – how much capital gains tax do I need to pay?’
The five areas under scrutiny:
• Long term direction from government, including through the planning process.
• The creation of a simplified legislative framework, which could include new objectives around public health.
• Regulation but “a fundamental strengthening and rebalancing of Ofwat’s regulation is needed”, it is argued.
• Transparency and accountability within private water firms.
• The management of water industry assets, including pipework.
Read more:
Thames Water hit with record fine by regulator
Government and Ofwat broke law on sewage spills, watchdog rules
Be the first to get Breaking News
Install the Sky News app for free
Sir Jon added: “I have heard a strong and powerful consensus that the current system is not working for anyone, and that change is needed. I believe that ambitious reforms across these complex and connected set of issues are sorely needed.
“I have been encouraged to see, on all sides of the debate, that people have been prepared to engage constructively with our work; I look forward to that continuing as we enter the final stages.”
