Increase in water bills by 30% projected for 2030, with potential mandatory use of water meters
In a bid to address long-standing issues in the water sector, an independent government commission has published a landmark report outlining a series of far-reaching recommendations. The report, which advocates for a new long-term water strategy, aims to promote sustainable, resilient water management, improve customer outcomes, secure investment, and strengthen environmental protections.
The key proposals include the establishment of new regional water system planning authorities and a single, integrated water regulator. Eight new regional authorities in England and one national authority in Wales would take over current planning responsibilities and resources from regulators. These authorities would develop water investment plans reflecting local priorities and streamline planning processes with representation from diverse stakeholders.
A new, single regulator would replace existing regulatory bodies in England and Wales to provide clearer, stronger accountability and oversight of the water sector. This regulator would hold water companies to account and manage regulatory frameworks.
To promote water conservation, the commission recommends making water meters compulsory for households and businesses. This move, coupled with changes to wholesale tariffs for industrial users and encouragement of water reuse and rainwater harvesting schemes, is intended to encourage more efficient use of water resources.
The report also emphasises the need to enhance consumer protections. Proposals include expanding the role of the Consumer Council for Water (CCW) into an independent Water Ombudsman to provide stronger protection and clearer complaint resolution pathways for customers. Additionally, transferring consumer advocacy responsibility to Citizens Advice and introducing a national social tariff to provide consistent bill support for low-income customers are among the recommendations.
Strengthening environmental regulations and monitoring is another key focus. Proposals include stronger rules on water abstraction, sludge management, drinking water standards, and water supply quality, as well as enhancements in wastewater discharge monitoring through greater digitalisation, automation, third-party assurance, and inspections. The report also suggests establishing a legally binding long-term environmental target for water.
Tightening oversight of water company ownership and governance is also recommended. New regulatory powers would be introduced to block changes in ownership where investors do not prioritize the long-term interests of companies and customers, ensuring water companies remain operationally and financially resilient.
Jon Cunliffe, who led the independent review, warned of a potential 30% real-terms increase in water bills over the next five years due to necessary investments. Mike Keil, chief executive at the Consumer Council for Water, stated that the success of the reforms depends on the commitment of water companies to improving their culture, conduct, and performance.
The water sector has faced public controversies, including financial mismanagement, steep bill hikes, and sewage being published into waterways. In May 2021, Thames Water was fined £123 million for breaching rules on waste water management and dividend payments.
The report sets out proposals to improve affordability and customer service, including upgrading the Consumer Council for Water to an ombudsman and introducing a national social tariff for low-income customers. Water bills rose by an average of £123 per year this spring, the largest hike since privatization in 1989, with significant regional variation.
Overall, the recommendations are designed to ensure a more efficient, sustainable, and customer-focused water sector in England and Wales. The success of these reforms will rely heavily on the commitment and cooperation of water companies and stakeholders alike.
- To complement the proposed water sector reforms, an individual might find it beneficial to subscribe to a personal finance newsletter that offers advice on investing in dividend-paying companies, including those in the water sector, to supplement their personal-finance strategy.
- As part of its water investment plans, one of the new regional water authorities could consider purchasing a property in an area prone to water shortages and develop a rainwater harvesting scheme to ensure a more sustainable water supply.
- The success of the water sector reforms in England and Wales might encourage similar initiatives in other regions, potentially leading to a rise in investments in water infrastructure and property developments focused on water conservation and efficiency.
