A blueprint for the future of the water sector in England and Wales

The headlines have focused on the proposed abolition of Ofwat as the economic water regulator, and the creation a new single regulator in England covering economic, environmental and drinking water quality regulation (with a similar body in Wales), in fact the report contains 88 recommendations in total, covering:

1. Establishing a new integrated Water Regulator for England (and a similar body in Wales)
2. Creating nine regional water system planning authorities
3. Rationalising legislation with a new legislative framework for water
4. Simplifying price review process and methodology
5. Strengthening regulation of company finances, including through a new supervisory approach to economic regulation, and formalising a recovery regime for companies
6. Review of competition markets for the water industry in England
7. Introduction of statutory resilience standards and improvements in asset mapping
8. Introduction of a single social tariff to provide support for customers who struggle to pay their bills, and a strengthened ombudsman function

The Commission’s final report lays out a blueprint to drive long-term transformation in the water sector through 88 targeted recommendations, now under review by UK Government.

The Environment Minister has already committed to implementing the move to a single regulator and four other recommendations (further details to be provided to parliament later today).

The report is a call for decisive reform, aligning regulatory stability with the sector’s need for long-term investment. However there is a lot of detail for Government to work through, not least how the move away from “light touch regulation” sits with the agenda for growth, and how a supervisory regulatory regime with more emphasis on the use of “constrained discretion” can provide the transparent, stable regulatory platform to encourage long-term investment.

The Commission’s Final Report acknowledges some of the tensions we highlighted in our article for The Water Report (July 2025). A significant challenge still remains to navigate the cross-currents of strategic direction, operational improvements and investor-friendly regulation.