Water bills set to soar by 30% in just five years as Ofwat to be scrapped

Clean water campaigners have slammed a major report into Britain's water sector for failing to propose the bold reform needed to fix the country's crumbling industry. The report by Sir Jon Cunliffe, a former Bank of England deputy governor, will lead to the scrapping of "failed" water regulator Ofwat.

Environment Secretary Steve Reed also insisted households will "never again" face major water bill hikes as he announced an overhaul of regulation. But James Wallace, the CEO of River Action James, said: "This was a once-in-a-generation opportunity to reset a broken and corrupted system. Instead, the Commission blinked.

"After three decades of privatisation, there is no evidence it can work. The report diagnoses symptoms but avoids the cure, appeasing the vulture capital markets and failing to propose alternative public-benefit investment, ownership and governance models that have been proven across Europe.

"We needed a credible plan to rescue Britain's rivers, lakes, and seas - and a clear pathway to bring failing companies like Thames Water into public control. Instead, we've been handed vague policy nudges that leave the current failed privatised water company model intact.

"When raw sewage is pouring into our waterways and reservoirs run dry, tinkering with regulatory half-measures simply isn't enough to restore public trust."

Mr 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 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".

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.

Giles Bristow, chief executive of Surfers Against Sewage, said: "Look past the glossy veneer of today's Independent Water Commission recommendations and you'll see it utterly fails to prioritise public benefit over private profit. This is not transformational reform, this is putting lipstick on a pig -and you can bet the champagne is flowing in water company boardrooms across the land.

"Voters are tired of swimming in sewage and drowning in ever rising bills. They won't accept any more toothless tinkering or PR spin-they demand specific, radical reform."

Sir Jon's review did not explore renationalising water companies as ministers have refused to entertain the possibility despite demands from campaigners to return them to public ownership.

Victoria Atkins MP, Shadow Secretary of State for Environment, Food and Rural Affairs, said: "We will study the Cunliffe Report into the water industry carefully. Labour have dithered and delayed over reform and only come up with a plan to raise water bills at a time where Labour's economic management has taken a wrecking ball to family finances. Meanwhile, calls for a 'social tariff' and push for compulsory metering could drive bills even higher."

The review suggested compulsory water meters, and also proposed a nationwide social tariff to help consumers who cannot afford their bills.

An Ofwat spokesman said: "The Cunliffe Report sets out a new direction for the water sector.

"While we have been working hard to address problems in the water sector in recent years, this report sets out important findings for how economic regulation is delivered and we will develop and take this forward with government. In advance of the creation of the new body, we will continue to work hard within our powers to protect customers and the environment and to discharge our responsibilities under the current regulatory framework. We will also work collaboratively with all our stakeholders to ensure a smooth transition."