Failing water sector needs stronger regulation, review says

The water sector in England and Wales is failing and needs stronger regulation to better protect billpayers and the environment, according to the interim findings of a landmark review.

The independent Water Commission, led by former Bank of England deputy governor Sir Jon Cunliffe, said on Tuesday that public trust had been shaken by "pollution, financial difficulties, mismanagement [and] infrastructure failures".

It added that there needed to be clearer direction from government, a better approach to long-term investment, and a stronger voice for local communities.

The review was set up by the government in October amid growing public concern about sewage spills and rising bills.

In launching the review, the government had ruled out nationalising the sector - arguing this would be too expensive and would not necessarily lead to improvements.

"There is no simple, single change, no matter how radical, that will deliver the fundamental reset that is needed for the water sector," Sir Jon said.

"We have heard of deep-rooted, systemic and interlocking failures over the years – failure in government's strategy and planning for the future, failure in regulation to protect both the billpayer and the environment and failure by some water companies and their owners to act in the public, as well as their private, interest."

He added that new legislation would be needed.

In response to Sir Jon's findings, Environment Secretary Steve Reed described the water system as "broken", adding that the UK government would respond to the commission in full.

A spokesperson for the Welsh government also thanked the commission and said it was considering its findings.

Responding to the Water Commission's interim report, the Liberal Democrat environment spokesman Tim Farron said: "At the heart of the sewage scandal is a regulatory system which has failed.

"It's time for Ofwat to go and the Commission must now make this plain."

The Conservatives have also been asked for comment.