Water companies to face regular MOT-style checks in industry shake-up

Inspections without notice, regular MOT-style checks and compulsory water efficiency labels on appliances are among the key measures in the government's overhaul of the water industry.

The government is describing the measures as the biggest overhaul of the water industry in England and Wales since privatisation.

Environment Secretary Emma Reynolds said there would be "nowhere to hide" for poor performing water companies.

The proposed changes come after widespread public anger at increasing numbers of pollution incidents, leaks and water outages that have affected thousands of customers across England and Wales in recent years.

Sir Dieter Helm, professor of economic policy at Oxford University, said the government had not wanted to explore nationalisation because its self-imposed spending rules have already been stretched to the limits.

"In addition to that, I think there's a very sensible view around government that the government probably isn't competent and capable to run these businesses," he said.

"The government should think really quite carefully about this, because if they're supervising the companies, and something goes wrong, whose fault is it?"

Problems in the beleaguered sector have been thrown into focus recently after tens of thousands of South East Water customers were cut off for several days both before and after Christmas.

Mike Keil, chief executive of the Consumer Council for Water (CCW), said the "miserable disruption" underlined the importance of "meaningful change" in water regulation.

A new, powerful ombudsman service would also be welcome, Keil said, given CCW has had a 50% increase in customers asking for help with complaints relating to their water provider.

"One of our key asks of the Independent Water Commission was to make our existing voluntary ombudsman service mandatory, as this is vital to giving customers robust protection," he said.

A spokesperson for Water UK welcomed the government's white paper, and added "the focus must now shift from diagnosis to delivery."

The spokesperson continued: "Our country will not have the environment it wants or the economic growth it needs until a new water regulator is established. Interim leadership should be appointed as soon as possible. We cannot afford for any more long-term decisions to be taken by a system everyone knows has failed."

Ofwat is currently the water industry's economic regulator for both England and Wales. In October 2025 the Welsh government said that when Ofwat is abolished it plans to form its own stand-alone economic regulator to replace it.

In 2025, water supply interruptions across England and Wales rose by 8% and pollution incidents by 27%, while customer satisfaction fell by 9%.

Average water bills rose by 26%, or £123 a year, from last April after years of below-inflation increases that some have blamed, along with high executive pay and shareholder dividends, on under-investment in the sector.

The sharp rise in bills is meant to address that under-investment by funding spending of £104bn over the next five years, more than 40% of which is earmarked for new infrastructure.