Fri, 19 April 2024

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By Earl Russell
Press releases

We must step up regulation of water companies to clean up our rivers and seas


3 min read

The public is rightly furious at the state of our waters. Water companies have been dumping raw sewage into our rivers and seas using storm overflows.

These safety valves should only be used in periods of high rainfall in order to avoid flooding people’s homes, but are now used routinely by water companies.

Since privatisation, pressures on the sewage network have increased due to climate change, population growth and property development. Levels of investment have not risen to match this, leaving a network that is unable to cope. This prompted the Industry and Regulators Committee to examine how the water regulators allowed this to happen and what is needed to clean it up.

The Environment Agency has been left struggling to monitor or enforce against water companies due to budget cuts

In our report, we found that for too long there was too little monitoring of sewage discharges, despite pressure from campaigners. Water companies should be made to monitor and report to the public as soon as possible on all spillages. Even with monitoring mostly in place now, the Environment Agency has been left struggling to monitor or enforce against water companies due to budget cuts. The government must give the Environment Agency the funding it needs to hold water companies to account.

Executives have been allowed to rake in bonuses and returns even as their companies have pumped out sewage. Regulators should be ensuring rewards are linked more closely to environmental performance, and there should be greater individual accountability for executives and directors of companies that are responsible for serious and deliberate pollution incidents, including criminal prosecution where appropriate. Ofwat should be allowed to bar irresponsible directors and executives from working in the sector again.

Population growth and climate change are increasing pressure on water supplies. An additional four billion litres of water a day will be needed in England by 2050. Addressing this gap will require a range of solutions, including building new reservoirs and reducing water demand. However, little action has been seen to date, with not a single new reservoir built in the United Kingdom since 1991.

Building new infrastructure to reduce environmental damage and meet future water needs will require a huge amount of investment, in the region of hundreds of billions of pounds over multiple decades. Water companies should meet much of this cost themselves. However customer bills, which have been flat or falling for 15 years, will have to increase in order to maintain our access to this essential resource. Currently, water companies provide support to vulnerable customers but this support differs greatly between different providers. The government should legislate to introduce a single social tariff, providing a minimum baseline of support that all providers across the country have to meet in order to protect vulnerable customers from unaffordable bill increases.

It is not clear that the government, regulators or companies are ready for the step change that the sector is about to see. Regulators need to move away from a gradualist mindset to enable significant, long-term infrastructure projects to be built. The government and regulators must ensure that the model used to build the Thames Tideway Tunnel can be used more frequently given its ability to reduce costs.

A range of policies affect our waters, including nature, housing, agriculture and transport. The government should consider these in a joined-up way by publishing a National Water Strategy. This document should set clear expectations for the water environment and water supply that regulators and companies can then work towards. This mess will only be cleared up if the government shows it has the political will to drive regulators and companies towards the clean, affordable and secure water system that we need for the future.


Lord Hollick, Labour peer and chair of the House of Lords Industry and Regulators Committee.

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Read the most recent article written by Lord Hollick - Urgent reform is needed to improve accountability and performance of UK regulators