Skip to main content

Government criticised for “lack of leadership” over water industry problems

19 September 2023

In a letter published today, the Industry and Regulators Committee has written to the Government to raise its continued concerns over water policy and regulation.


On Wednesday the 22 March 2023, the Committee published its report ‘The affluent and the effluent: cleaning up the failures of water regulation’. The report concluded that under-investment, insufficient government strategy, and inadequate co-ordination has resulted in a failure to “treat water with the care and importance it deserves”. The Government responded on 5 June 2023.

Since the report’s publication, there have been a number of further developments in water policy and regulation. The Committee therefore launched a short follow-up inquiry into Ofwat, the water industry and the role of Government in June 2023, during which it heard from the water industry, Ofwat, and the Minister for Environmental Quality and Resilience, Rebecca Pow MP. This letter represents the conclusion of that follow-up work.

The Committee’s letter

In its letter to Rt Hon Thérèse Coffey MP, Secretary of State for Environment, Food and Rural Affairs, the Committee sets out conclusions and recommendations on a range of issues including investment and bills, financial resilience, wet wipes, future water supply, and regulatory powers.

The Committee’s letter:

  • criticises the “dismissive brevity and complacent tone” of the Government’s response to its initial report;
  • warns that continued under-investment in water infrastructure will have serious long-term consequences for the environment and the security of water supplies, risking the possibility of future water shortages;
  • expresses doubt that the sector will be able to attract the investment it needs;
  • warns that water bills are likely to increase, and expresses disappointment that the Government has not introduced a single social tariff to support those struggling to pay their bills;
  • expresses dismay with the “unnecessary” delay in banning wet wipes containing plastics;
  • concludes that Ofwat and the Environment Agency’s lack of confidence is holding back nature- and catchment-based approaches;
  • concludes that proposals for reducing water demand are insufficient to meet Government targets.

It calls on the Government to:

  • set out what action it intends to take to increase investment in the water sector;
  • give clear guidance to Ofwat on the balance between investment and the affordability of customer bills ahead of the next Price Review;
  • announce its proposals on social tariffs as soon as possible;
  • provide long-term, outcomes-based targets for the key areas of investment needed in the sector, particularly in relation to infrastructure investment;
  • introduce compulsory water metering;
  • set out whether it intends to introduce sustainable drainage requirements in advance of any relaxation of nutrient neutrality rules.

Chair’s comments

Lord Hollick, Chair of the Industry and Regulators Committee said:

“While the Government has begun to set out its vision for the sector, our cross-party committee has concluded unanimously that there is insufficient policy or drive to meet the Government’s targets. Sadly, the only thing that is becoming clear in the murky, polluted waters of the sewage crisis is a lack of leadership and deep-rooted complacency.

The Government must therefore provide firmer policy detail and greater guidance to regulators, who cannot be left to resolve these huge challenges by themselves. In particular, the Government must give clear guidance on the trade-off between much-needed investment and the level of customer bills. We look forward to the response from the Secretary of State, setting out how she intends to do this.”

Further information