UK Government Proposes New Regulator to Overhaul Water Sector

UK Water Sector Overhaul

LONDON, Jan 19 (Reuters) - Britain will outline plans to improve England's water sector on Tuesday, promising a new regulator with powers to make more checks on infrastructure and try to prevent sewage spills and supply outages.

The government has said the privatised water sector is broken, after levels of sewage pollution rose following years of under-investment, while the country's biggest supplier, Thames Water, battles to survive after being loaded up with debt.

In the most recent setback, two incidents over the last six weeks have left tens of thousands of households in south east England without water for days.

Government's Plan for Regulation

The creation of a new regulator, which would combine several existing authorities, was first suggested last July, and environment minister Emma Reynolds said the government's plans for new legislation would help ensure better performance by water companies.

Thames Water's Challenges

"Water companies will have nowhere to hide from poor performance, customers will get the service they deserve, and investors will see a system built for the future," she said in a statement.

Thames Water, which is in the process of trying to secure regulatory backing for a rescue plan led by some of its lenders, has complained that the heavy fines it faces prevent it from investing to improve its performance.

Performance Improvement Regime

The government said its plan was for a 'Performance Improvement Regime' to help "underperforming water companies recover faster". It did not provide further details.

The new regulator would also carry out "health checks" on water companies' pipes, pumps and infrastructure, with the ability to show up without notice.

(Reporting by Sarah Young, Editing by Paul Sandle)