Water bills are rising, public anger over sewage pollution has not abated, and the government has now set out a major overhaul of water regulation in the king’s speech.
The proposed water reform bill signals a shift in emphasis. Rather than focusing solely on water companies, the legislation aims to address pollution more broadly, including contributions from agriculture and industry. This wider lens has long been missing from water policy and is, in principle, a welcome change.
The bill also promises a more unified regulatory system. The financial regulator Ofwat, the Drinking Water Inspectorate and the water-related arms of the Environment Agency and Natural England would be brought together under a single regulatory umbrella. The intention is to end the fragmented oversight that has characterised the sector for decades.
These proposals follow the recommendations of the Independent Water Commission, as outlined in the 2025 Cunliffe review which critiqued England’s privatised water industry, and Labour’s white paper. Yet despite the language of reform, the vision looks less like a radical reset and more like a reboot of privatisation.
The Clean Water Now coalition – a group of over 40 environmental groups – has put forward proposals that include three main asks: to fix the system, stop the polluters and restore nature.
Public opinion polling consistently shows strong support for bringing water back into public ownership. Labour’s white paper, however, places clear emphasis on “making water a more attractive and reliable sector for investors seeking stable and fair returns”. It is this focus that will worry campaigners, as it suggests continuity with an economic model widely blamed for underinvestment, rising bills and environmental harm.
The government also promises more joined‑up and longer‑term regional planning for water. Solutions don’t just involve tightening regulations and enforcement within the water industry. Everything from agricultural fertilisers, road runoff and chemical factory waste can contribute to pollution. Preventing the release of contaminants is vital, before pollution reaches the water treatment system.
But some of the most pressing challenges appear to receive surprisingly little attention. Climate change, for example, is mentioned only once in the government’s 53‑page white paper, in a brief statement about “future‑proofing” the regulatory framework against emerging pressures.
That omission matters. Changing rainfall patterns are already increasing sewage discharges, placing additional strain on ageing infrastructure. Periods of low river flow and drought make pollution events more damaging, not less, because contaminants are more concentrated in a smaller volume of water. Water scarcity, meanwhile, will intensify demand for water and competition between households, agriculture and industry. Clean water is becoming even more valuable as a commodity.
Ignored warning signs
Ofwat reports from more than 20 years ago warned that climate change would require long‑term planning and major infrastructure investment. The Ofwat annual reports for 2007-08 states: “We have also started to develop guidance for companies to assess the robustness of their infrastructure to extreme events so that they can take best account of the challenges of climate change in planning and delivering services to consumers.” The industry failed to respond and the regulator failed to regulate.
After three decades without a single new reservoir being built, the government is now legislating for several over the coming years – a tacit admission that those warnings were ignored.
The government argues that a new, integrated regulator will provide greater stability, transparency and a clearer view of both economic and environmental performance. That ambition will only be realised if transparency is actively safeguarded.
Decisions about whether revenue is directed towards shareholder returns, infrastructure investment or environmental protection will increasingly sit within a single body. This makes scrutiny of that internal decision-making crucial.
The reforms promise coherence and long‑term thinking. Whether they deliver genuine environmental improvement – or simply a more streamlined version of the status quo – will depend on how robustly the new system is designed, and whose interests it ultimately serves.
