Water regulator Ofwat will be abolished as part of an overhaul of a “broken” regulatory system, the environment secretary has confirmed.
Steve Reed said the water industry is “broken” and firms have been fleecing the public under a “regulatory system that let them get away with it”.
Speaking in south-west London, he said: “Our rivers, lakes and seas are polluted with record levels of sewage.”
Mr Reed blamed soaring water bills for straining household finances and warned that poor infrastructure is holding back economic growth. And he blamed rogue water bosses prioritising payouts to shareholders over investment in infrastructure over decades.
He said: “Around £85bn was paid out to shareholders since privatisation, and we’ve seen from the state of sewage in our waterways that there was inadequate investment going into into the water system.
“There were people there that were gaming the system… the previous government allowed regulation to be too light touch.”
Mr Reed thanked Sir Jon Cunliffe and his team for their “outstanding” report and said he would give a fuller response in the Commons this afternoon.
“Water companies have been allowed to profit at the expense of the British people,” he said. Mr Reed
He added: “The government will abolish Ofwat. In the biggest overhaul of water regulation in a generation, we will bring water functions from four different regulators into one.
“A single, powerful regulator responsible for the entire water sector will stand firmly on the side of customers, investors and the environment and prevent the abuses of the past.
“It will provide the clarity and direction required for a strong partnership between Government, the sector and investors to attract billions of pounds of new investment.”
