A comprehensive 465-page report by the Independent Water Commission, chaired by former Bank of England deputy governor Sir Jon Cunliffe, has laid bare the systemic issues plaguing England and Wales’ water sector. Released on July 22, 2025, the review proposes sweeping reforms to address sewage spills, rising bills, and public distrust. Here are five critical takeaways from the landmark report.

1. Regulatory Overhaul: Ofwat to Be Replaced

The review points to shared responsibility among government, water companies, and regulators for the sector’s failures, with the current regulatory framework drawing particular criticism. The economic regulator Ofwat, alongside the Environment Agency, Natural Resources Wales, and the Drinking Water Inspectorate, splits oversight duties, leading to inefficiencies. The report’s boldest recommendation is to replace Ofwat with a single regulator for England and another for Wales, streamlining accountability. The government has confirmed it will scrap Ofwat, marking a significant shift in how water companies are held accountable for delivering value to billpayers and protecting the environment.

2. Ending Self-Monitoring by Water Companies

Public outrage over sewage spills, which reached 3.6 million hours in 2024, has been fueled by improved monitoring but hampered by water companies’ self-reporting. Described as “marking their own homework,” this practice undermines trust. The review advocates for stronger regulatory oversight, including automated systems, third-party audits, and intelligence-led inspections. It also calls for advanced technologies, such as AI, to better measure sewage spill impacts and other pollutants like microplastics and forever chemicals, moving away from reliance on outdated electronic monitors.

3. Tighter Controls on Ownership, No Nationalization

The report proposes greater regulatory scrutiny over water company ownership and executive accountability, alongside measures to attract long-term investors and improve financial oversight. However, nationalization was explicitly ruled out by the government, despite calls from campaigners like Surfers Against Sewage, who criticized the report for prioritizing private profit over public benefit. Sir Jon defended the privatized system, arguing it can work with robust regulation, but emphasized that public frustration stems from high executive pay amid poor performance, necessitating stronger regulatory intervention.

4. Rising Bills to Address Underinvestment

The review highlights a decade of underinvestment (2009–2024) driven by pressure to keep bills low, which has left infrastructure ill-equipped to handle climate change and population growth. Recent bill increases of 26% from 2024/25 to 2025/26 reflect the need to catch up. To mitigate the impact on vulnerable households, the report suggests a national social tariff in England and a review of Wales’ existing tariffs. Compulsory smart meters are also recommended to reduce water demand, potentially easing costs over time, though bill increases are deemed inevitable.

5. No Quick Fixes, Long-Term Commitment Needed

Environment Secretary Steve Reed framed the review as a chance to “clean up our water once and for all,” but Sir Jon cautions that there are no immediate solutions. Building new infrastructure and restoring public trust will take years, with no single reform capable of resetting the sector overnight. Of the 88 recommendations, the government has committed to scrapping Ofwat and implementing four others immediately, leaving 83 under consideration. The pace and scope of these changes will depend on parliamentary action and sustained political will.

Looking Forward

The Water Commission’s report marks a pivotal moment for England and Wales’ water sector, addressing long-standing issues of pollution, mismanagement, and public distrust. While the proposed reforms promise a path to cleaner waterways and better services, their success hinges on government action and sustained investment. As the public grapples with rising bills and ongoing sewage spills, the road to recovery will require patience and accountability from all stakeholders.