News

Members of the Worshipful Company of Water Conservators have worked to share their knowledge and enperience, on behalf of the Company, with government, agencies, regulators and other organisations.  We have supported the work of The Independent Water Commission (IWC) established by the UK and Welsh governments in October 2024. Its objective was to provide recommendations for a fundamental ‘reset’ of the water sector – to restore public confidence in the sector and its regulation, to ensure action to attract
the investment needed to clean up the waterways of England and Wales, and to establish a framework that will meet the water demands of the future.

The Independent Water Commission has just published an interim report with a number of “emerging conclusions” on how to improve the water sector’s regulatory system in England and Wales. Below is a their summary of the report’s findings:

What we heard was clear: the current system is not delivering what
people expect and need.

Public trust in the water sector has been shaken – by pollution, financial difficulties,
mismanagement, infrastructure failures, and by a sense that decisions affecting
people’s daily lives are made too far from their communities, that local voices are
lost. Restoring that public trust is paramount.

The Commission’s final report, in the summer, will have our full conclusions and
recommendations across the range of issues that have been raised with us. This
interim report sets out our preliminary conclusions in a number of key areas that we
believe have to be at the centre of reforming the system.

First, the sector needs a clearer and more consistent long-term direction – one that
aligns environmental ambition, the provision of water supply and wastewater
removal, and the expectations of customers. Too often, policy has been shaped by
short-term pressures rather than by sustained, coherent planning. A credible reset
must be grounded in a long-term strategic vision that is sustained over political and
regulatory cycles. This is also important to support smoothing of customer bills over
time, avoiding the spikes we have seen in the most recent price review. And it must
be supported by a more effective planning framework – in England, at the regional
water system level; in Wales, at the national level – reflecting local priorities and
respecting local voice while maintaining national coherence; and better integrating all
of the sectors that impact on and interact with the water environment, including
farmers.

Second, we believe the legislative framework that underpins the sector must be
revisited. Over the years, a complex layering of statutory duties and regulatory
obligations has created a system that can be difficult to navigate, both for those
delivering services and those holding them to account. A streamlined, and more
focused legislative framework could clarify lines of responsibility and remove any
ambiguity around purpose. As part of this, it would be an opportunity to update the
legislation to take account of the latest science and consider whether its objectives
need to be broadened, for example, to include public health. And we see a role for
constrained discretion within the regulatory framework — flexibility to support
decisions that allow for innovation, such as nature-based solutions, while maintaining
clear accountability. Such an approach can help unlock both environmental and
economic objectives and support long-term investment in a more adaptive sector.

Third, the model of regulation must be fundamentally strengthened and rebalanced.
We believe a more supervisory approach to water companies is needed — one that
combines strategic oversight with a deep understanding of company-specific
contexts. This means earlier, more active engagement by regulators to identify and
address emerging risks, and to assess capability. And it means a regulator better
able to support turnaround where performance is falling short. Such an approach can
build regulatory confidence, improve delivery outcomes, and restore legitimacy in the
eyes of customers and the public. With respect to customers, the consumer voice
should be strengthened and affordability measures implemented to ensure
customers get what they have paid for and vulnerable customers are supported.

Fourth, the water companies must be made more attractive to stable, long-term
investors. As effective monopolies providing an essential public good, it is
appropriate that water companies should present relatively low risks and
consequently offer relatively low returns. However, to attract such long-term
investors, willing to make the substantial future investment we need, risks also need
to be lower than they are presently. In large part, this means restoring confidence in
the stability and predictability of the regulatory system. But the industry also has a
major part to play and there are also lessons from other sectors – for example,
around governance and management responsibilities – we should explore.

And finally, water infrastructure resilience must be brought to the fore. Climate
shocks, ageing assets, and rising demand mean the system faces growing pressure.
Resilience must be treated not as a technical afterthought but as a strategic
imperative. An infrastructure resilience and asset health framework is required to
ensure that we do not just fix failures when they occur but rather responsibly plan for
the long-term condition and performance of critical assets.

We do not underestimate the scale of the challenge. But the case for a reset — of
how we plan, regulate, and govern water in England and Wales — is compelling.
This report outlines our direction of travel, and the scale and nature of the change
necessary, and sets the stage for our final report.