LONDON, June 3 — The water sector in England and Wales is failing and urgently needs stronger regulation to protect the environment and consumers, according to the interim findings of a major government-commissioned review.

Led by former Bank of England deputy governor Sir Jon Cunliffe, the independent Water Commission says public trust in the water industry has been severely damaged by “pollution, financial troubles, mismanagement, and infrastructure failures.”

The review, launched by the UK government in October amid growing public outrage over sewage spills and rising water bills, highlights systemic failures across government, regulators, and water companies. Sir Jon stressed that no single reform would be enough to fix the system, and called instead for a complete “reset.”

“We’ve heard about deep-rooted, interconnected failures over many years,” he said. “There has been failure in government strategy, failure in regulation, and failure by some water companies and their owners to act in the public interest.”

Key Findings and Recommendations

The interim report calls for:

• Stronger, better-resourced regulators, including the Environment Agency, Ofwat, and Natural Resources Wales
• New legislation to clarify roles and strengthen oversight
• Greater long-term investment planning
• A stronger voice for communities affected by water industry decisions
• Potential consolidation of regulatory bodies to improve efficiency and accountability

Sir Jon compared the level of oversight needed to that used in banking, arguing regulators should be “closer to companies,” not only to catch problems early, but to help prevent them.

Industry and Political Response

Environment Secretary Steve Reed responded to the findings by calling the current system “broken,” promising a full government response once the final report is delivered this summer.

A spokesperson for the Welsh government also acknowledged the findings, saying it is reviewing the commission’s recommendations.

Meanwhile, water companies say they are listening. Stuart Colville, deputy chief executive of Water UK, the industry trade body, said companies are aware of public anger and want to rebuild trust by delivering faster, more meaningful improvements.

Environmental groups, however, are pushing for deeper change.

“We need to restructure water companies around public benefit,” said James Wallace, CEO of River Action UK. “This isn’t just about attracting investors—it’s about cleaning up our rivers.”

Mounting Pressure

The water industry faces increasing strain due to climate change, population growth, and decades of underinvestment. More extensive monitoring has revealed the scale of the sewage crisis, with raw sewage spilling into rivers and coastal waters for over 3.6 million hours in both 2023 and 2024.

Though some spills are legal during wet weather, the BBC has found evidence of illegal discharges during dry periods, raising serious concerns.

Despite this, water bills in England and Wales rose by an average of 26% in April as regulators approved multi-billion-pound investment plans to modernise infrastructure and reduce pollution.

Looking Ahead

The Water Commission’s final report is due later this summer. The government will then decide which of its recommendations to implement.

Opposition parties have also weighed in. Labour’s shadow environment secretary Victoria Atkins said the party would study the report carefully, noting that Labour in government had cracked down on bonuses for polluting water firms and prosecuted offenders.

Liberal Democrat environment spokesperson Tim Farron called for a complete overhaul of regulation.

“At the heart of the sewage scandal is a failed regulatory system,” he said. “Ofwat must go, and the Commission must say so clearly.”