Ofwat to be abolished after Independent Water Commission finds that a fundamental "reset" is needed

Today, 21 July 2025, the English and Welsh water industry is facing calls for its most radical overhaul in decades, following the publication of a report by the Independent Water Commission.

The 464-page document recommends sweeping structural reforms which are aimed at fixing the system that is fragmented, underperforming and failing the public and the environment. It includes 88 recommendations that should be implemented to improve the water industry.

Just days ago, a report published by the Environment Agency found that pollution incidents reported by water companies increased by 60% in England and Wales, for 2023 and 2024. Additionally, the average water bill in England and Wales is set to rise by 36% over the next five years, and many water firms are accused of passing the cost of improving their systems, after years of severe underinvestment, onto their customers.

Sir Jon Cunliffe, the former civil servant and central banker who led the Commission, said: "This sector requires fundamental reform on all sides – how we manage the demands on water, how the system is regulated, how companies are governed and how we manage the critical infrastructure on which we all rely."

"It may sound academic, but it is profoundly important. A clear set of national priorities for water – covering the water industry, agriculture, land-use, energy, transport, housing development – is essential. Without it, we will continue to be dogged by inconsistency, short termism, unintended consequences and risk willing the ends without ever fully understanding the means required."

Here are some of the recommendations published in the Cunliffe report:

• modernisation of the legal framework for water;
• regulatory changes, including a new, integrated water regulator,
• a long-term, cross-sector strategy for water;
• greater transparency, including operator self-monitoring and scrutiny over water company reporting;
• introduction of a social tariff to improve affordability and customer service;
• changes to the economic regulation of water companies, including a "company-specific supervisory function", which would feed into the current price review structure; and
• new national resilience standards for infrastructure, to help guarantee the maintenance of underground pipes and other water and wastewater assets.

Following the publication of the report, the Government announced that Ofwat will be abolished and replaced by a "new, single, powerful regulator", which will take over the responsibilities of policing the water industry, currently shared between Ofwat, the Environment Agency, Natural England, and Drinking Water Inspectorate.

Additionally, DEFRA spokesperson announced that the "Secretary of State is expected to announce 'root and branch' reforms to clean up rivers, lakes and seas and make the water sector one of growth and opportunity that serves hard-working families and businesses, as part of our Plan for Change".

The Minister for Water and Flooding, Emma Hardy, has told the BBC that she will be looking at the report all the way through the summer in order to create a white paper outlining how many of the 88 recommendations published in today's report will be adopted.