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Factbox-What are the key recommendations for reforming UK's water sector?
Published by Global Banking & Finance Review®
Posted on July 21, 2025
3 min readLast updated: January 22, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on July 21, 2025
3 min readLast updated: January 22, 2026
The UK's water sector reform report suggests a single regulator, enhanced ownership oversight, and a national strategy to improve regulation and environmental protection.
LONDON (Reuters) -An official report released on Monday outlined a plan to overhaul Britain's water sector, seeking to better protect the environment, investors, and consumers.
The privatised water industry in England and Wales has sparked widespread anger by releasing record levels of sewage into rivers and lakes, prompting the Labour government to promise major reforms when it was elected last year.
Below are the highlights of the report's 88 recommendations by the Independent Water Commission:
SINGLE WATER REGULATOR
The report recommends a single water regulator in England and one in Wales to replace the current fragmented regulatory system. This would streamline oversight, close regulatory gaps, and boost investor confidence as the sector faces major challenges from climate change and population growth, the report said.
OVERSIGHT OF OWNERSHIP
The Commission recommended tighter oversight of water company ownership and governance, including powers for the regulator to block changes in ownership if investors are not seen to be prioritising the long-term interests of the company and its customers. It recommended that the regulator set "minimum capital" requirements so that companies are less reliant on debt and more financially resilient.
ECONOMIC REGULATION
The Commission called for a reset of economic regulation with a new "supervisory" approach for tailored oversight and earlier interventions. It also recommended changes to the Price Review process to ensure proper investment and attract long-term, low-risk funding.
NEW REGIONAL AUTHORITIES
The report proposed creating eight new regional water planning authorities in England and one national authority in Wales. They would be responsible for developing water investment plans, streamlining existing planning processes, directing funding and ensuring accountability from all sectors that impact water.
LONG-TERM NATIONAL STRATEGY
The Commission called for a National Water Strategy covering at least 25 years and with regular milestones. The strategy should guide cross-sector water use and be supported by ministerial priorities to guide regulation.
NATIONAL SOCIAL TARIFF
The report recommended a national social tariff to ensure consistent support for low-income customers who need help to pay their bills, addressing current regional disparities.
STRONGER ENVIRONMENTAL REGULATION
The report urged stronger environmental regulation, including improved monitoring, stricter rules on abstraction, sludge, drinking water standards and water supply. It recommended compulsory water metering, revised tariffs for industrial users, expanded water reuse and rainwater harvesting schemes. It also set out where environmental legislation needs updating.
INFRASTRUCTURE
The report called for reforms in how water infrastructure is managed, monitored and delivered, including new requirements for companies to map and assess their assets.
(Reporting by Catarina Demony.Editing by Mark Potter)
The report recommends establishing a single water regulator in England and one in Wales to streamline oversight and close regulatory gaps.
It recommends implementing a national social tariff to provide consistent support for low-income customers who struggle to pay their bills.
The Commission calls for a reset of economic regulation with a new 'supervisory' approach for tailored oversight and earlier interventions.
The proposed regional authorities would be responsible for developing water investment plans and streamlining decision-making processes.
The report urges stronger environmental regulation, including improved monitoring and stricter rules on water abstraction and supply.
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