Environment Secretary Steve Reed has announced a series of initial steps aimed at addressing the ongoing crisis in the water sector. The measures represent a significant shift after years of failure to ensure the water industry curbs illegal sewage dumping and attracts major private-sector investment to upgrade infrastructure, while prioritizing the interests of customers and the environment.
As Ofwat publishes its draft responses on water company spending, the Secretary of State for Environment, Food and Rural Affairs emphasized the government’s commitment to holding water companies accountable for their performance. Reed will meet with water company Chief Executives to outline plans for collaboration with the sector and investors to attract investment, create jobs, and clean up the nation’s polluted waterways.
Key Announcements:
- Infrastructure Investment Ringfencing: Reed has written to Ofwat, requesting that funding for vital infrastructure investment be ringfenced, ensuring it can only be spent on upgrades benefiting customers and the environment. Unspent investment funds should be refunded to customers and not diverted for bonuses, dividends, or salary increases.
- Revised Company Objectives: Water companies will be required to place customers and the environment at the core of their objectives. Companies are expected to change their ‘Articles of Association’ to make the interests of customers and the environment a primary objective.
- Customer Empowerment: New measures will grant consumers unprecedented powers to hold water company executives accountable through new customer panels. These panels will have the authority to summon board members and hold them to account.
- Enhanced Protection and Compensation: Strengthened protections and compensation for households and businesses when basic water services are disrupted. Subject to consultation, compensation amounts for unmet standards will more than double and will be triggered by a broader range of circumstances, including Boil Water Notices.
Secretary of State Steve Reed’s Statement:
“We will never look the other way while water companies pump sewage into our rivers, lakes, and seas. This unacceptable destruction of our waterways should never have been allowed, but change has now begun so it can never happen again.
Today, I have announced significant steps to clean up the water industry, cut sewage pollution, protect customers, and attract investment to upgrade its crumbling infrastructure. That change will take time. Over the coming weeks and months, this Government will outline further steps to reform the water sector and restore our rivers, lakes, and seas to good health.”
These steps align with the Government’s manifesto commitments to put failing water companies under tough special measures to clean up waterways. Reed’s announcements mark the beginning of a broader initiative to reform the water sector and ensure the protection and enhancement of the UK’s natural water resources.
