Government plans to abolish Ofwat and replace it with a new water regulator have been likened to “rearranging the deck chairs on the Titanic” by the Green Party co-leader, Adrian Ramsay MP who leads a call to renationalise the water industry “and fix its problem.”

Plans to ‘end sewage spills and financial mismanagement’ in England and Wales by disbanding the Drinking Water Inspectorate and the Environment Agency, Ofwat have been backed by the Environment Minister, Steve Reed who has called this the “biggest overhaul of water regulation in a generation.”

It’s the Labour government’s bid to ‘reset’ a sector tarnished by scandals over sewage spills and financial mismanagement and one that follows a major review of the sector released today. The government will adopt the recommendation for England and Wales made in the review it commissioned from Sir Jon Cunliffe – a former deputy governor of the Bank of England. 

“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,” said Environment Minister, Reed. “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.”

The government has said that the creation of “one powerful regulator” will be responsible for the entire water sector restoring public faith and investor confidence in the British water industry, adding that it is the “complex web of regulators” previously that has led to contradictory and competing priorities.

The proposals will be consulted on this autumn and form the basis of a new Water Reform Bill. It comes off the back of a commitment made by Environment Secretary Reed to ‘cut sewage pollution from water companies in half by 2030.’ 

“Working to make our rivers the cleanest since records began, it is the most ambitious sewage target the Government has ever set,” read a statement from the UK Government.

But that is perhaps because it needs to be. Serious water-polluting incidents increased by 60% in 2024, with three companies accounting for the majority of them. Thames Water, the most troubling case for the government and the UK’s largest water company, is currently operating under a £20bn debt while fighting off financial collapse.

Emma Hardy, the minister for water and flooding, said the government would spend the summer examining how many of the report’s 88 recommendations it will adopt. 

“We are going to introduce a water bill next year that will change the law and put many of them into law,” she said. According to The Guardian, five of the recommendations will be fast-tracked and announced in Parliament later today (Monday, July 21st). 

Critics and campaigners for healthier UK waters state, however, that the report does not go far enough in its recommendations. Co-leader of the Green Party, Adrian Ramsay MP says it was a ‘mistake’ for the government not to allow the Cunliffe review to explore a return of water regulation to public ownership.

“Expecting a different form of regulation to fix the water industry is, frankly, rearranging the deck chairs on the Titanic. Not only that but the majority of the public are going to be expected to pay more in bills, as we watch the industry continue to sink under the failed model of privatisation,” he said.

“The government deliberately left out the option of public ownership from the review, but that’s the only real way to get the water industry to clean up its act, end millions being siphoned off for huge CEO salaries and shareholder dividends, and instead see this money invested into ending sewage dumping and fixing leaks.” 

The commission was banned by Reed from considering the nationalisation of water. It did, however, consider the possibility of water companies transferring a not-for-profit model, as is employed at Welsh Water.

James Wallace, the chief executive of River Action, said: “This was a once-in-a-generation opportunity to reset a broken and corrupted system. Instead, the commission blinked. After three decades of privatisation, there is no evidence it can work.

“The government must act now with a powerful statement of intent by putting our biggest polluter – Thames Water – into Special Administration to send a warning shot across the stained bows of the Sewage Armada. Anything less will signal the UK is open to yet more corporate takeover. Our water is our life-blood and not for sale.”

Among a list of issues taken up with the report, River Action has said that key omissions include ending the privatisation model and shifting to public-interest ownership; restructuring debt by using government-backed bonds that would reduce interest costs from 10-12% to 4% and save 50% of customer bills; and triggering the Special Administration Regime to bring failing companies like Thames Water into public ownership.

“We need bold and decisive leadership from the Labour government to give the Environment Secretary and Defra the resources and support he needs to tackle the sewage scandal and freshwater emergency,” continued Wallace.

“If ministers fail to act now, they are not just neglecting their duty – they are protecting polluters and pandering to international investment markets, putting at risk our national water security, natural environment, and public health.

“Delay and weakness is complicity in the further destruction of the lifeblood of our economy.”

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