Scrap Ofwat, says MP, after Cunliffe report

Liberal Democrat MP Pippa Heylings has urged the government to scrap Ofwat and replace it with a new regulator with the power to hold polluting water companies to account.

It comes after an interim report from Sir Jon Cuncliffe’s Independent Water Commission argued that the water industry needs a “fundamental reset”. The full report is expected “later this summer”.

Ms Heylings, MP for South Cambridgeshire, said: “It’s going to take more than a hose down to clean up the water industry. It’s time for Ofwat to go and the commission must now make this plain.

“This report makes it painfully clear that water companies can pollute and make profit with impunity – all at customers’ expense. At the heart of the sewage scandal is a regulatory system which has failed.

“Liberal Democrats across Cambridgeshire will continue to campaign hard to protect our precious rivers and chalk streams. I have been working with constituency campaigners on this issue since before I was elected, and the government has so far ignored us.”

The Independent Water Commission was tasked by the UK and Welsh governments to carry out the largest review of the sector since privatisation in the face of widespread public anger over pollution, bills and bosses’ bonuses, although ministers ruled out nationalising water companies.

In the interim report, the commission called for regulator Ofwat’s role to be strengthened and for the watchdog to adopt a more “supervisory” approach.

Former Bank of England deputy governor Sir Jon told reporters that more effective regulation was a huge part of solving the problem, with a regulator that could step in early.

He said having regulators with different remits and responsibilities for different parts of the process had made the water system “expensive and incoherent”.

The interim review urges the government to provide clearer long-term direction on what is needed from the water system, and warns key elements of current legislation are “badly in need of review and rationalisation”.

It proposes greater regional decision-making around local water systems, and emphasises the need for a greater focus on long-term, responsible investment and ownership within the industry.

It is also considering new standards for the water sector’s crumbling infrastructure, warning there is insufficient understanding of the health of assets such as pipes and water treatment plants. Companies should plan for long-term resilience of “critical assets”, not simply fix things when they fail, it warned.

Environment secretary Steve Reed said he had commissioned the water commission to outline plans for “once in a generation” changes.