Ofwat to be abolished in biggest overhaul of water since privatisation
Source: gov.uk (2025-07-21)

Ofwat to be abolished and a new, single, powerful regulator to be established to cut water pollution in England’s rivers, lakes and seas, and protect families from massive bill hikes

Ofwat to be abolished and a new, single, powerful regulator to be established to cut water pollution in England’s rivers, lakes and seas, and protect families from massive bill hikes

New regulator will take responsibility of water functions across Ofwat, Environment Agency, Natural England and Drinking Water Inspectorate, ending complexity that gets in the way of delivering for customers

Government to fast track five recommendations from the Independent Water Commission in the Commons later today

Ofwat is to be replaced by one single water regulator responsible for the entire water system, the Government has announced today (Monday 21 July).

In the biggest overhaul of the water sector since privatisation, Ofwat will be abolished and its functions will be merged with water functions across the Environment Agency, Natural England and the Drinking Water Inspectorate to form a new single, powerful regulator.

In a speech at Kingfisher Wharf, the Secretary of State for the Environment, Steve Reed pledged to strengthen regulation, clean up the country’s s rivers and protect the public from soaring water bills.

There are currently four separate regulators responsible for the water industry, a complex, tangled system of confusion. It is a merry-go-round of regulators blaming each other for breaking this country’s water system.

Ofwat has failed customers, allowing water companies to mismanage billions of pounds of customer money while water companies paid out huge dividends and bonuses.

The Environment Secretary, Steve Reed said:

Our water industry is broken. That is why this Government will fix our broken regulatory system so the failures of the past never happen again.

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.

The creation of one powerful regulator will be responsible for the entire water sector restoring public faith and investor confidence in our water industry.

The current fragmented approach of four separate regulators splits up economic, environmental and drinking water regulation. This complex web of regulators has led to contradictory and competing priorities.

The reforms will ensure all regulation is in lock step to deliver for customers and the environment, bringing all water regulation under one roof.

The proposals will be consulted on this autumn and form the basis of a new Water Reform Bill.

This comes on the back of a bold, personal commitment from Environment Secretary, Steve 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 Government has ever set.

The Government has begun rebuilding the entire water network through one of the largest infrastructure projects in the country’s history. £104 billion is being invested to upgrade crumbling pipes and build sewage treatment works across the country, ensuring communities can once again take pride in their beaches, rivers and lakes.

These reforms build on decisive action taken by the Government over the past year to clean up England’s rivers, lakes and seas:

Record investment: with £104 billion to upgrade crumbling pipes and build sewage treatment works across the country.

Ringfence customers’ bills for upgrades: customer bills earmarked for investment must now be spent one new sewage pipes and treatment works – not spent on shareholder payments or bonuses.

Reinvesting company fines into local projects: with over £100million being invested into local clean-up projects in communities.

Largest budget for water regulation: the Environment Agency received a record £189 million to fund hundreds of enforcement officers to inspect and prosecute pollution water companies.
- Polluter Pays: we’ve changed the law so that regulators can recover the cost of enforcement activity, ensuring that the polluter pays. This builds on the increase in water company inspections, holding them to account.
Banning wet wipes containing plastic: in England reducing microplastics in our waters.
- The Water (Special Measures) Act: banned unfair bonuses for ten polluting water bosses this year and threatened prison sentences for law-breaking executives.
The Secretary of State for the Environment will outline five recommendations that the Government will fast track in Parliament later today.

Alongside our creation of a new single regulator in England, we will work closely with Welsh government to devolve economic regulation of water to Wales.

ENDS

NOTES TO EDITORS

During the transition to the new regulator, Ofwat will remain in place. The Government will work closely with the regulators and unions for a smooth transition.

The UK government will work closely with the Welsh government to ensure these reforms protect customers and the environment in both England and Wales

Once the new regulator is established, the Government will publish a comprehensive long-term statement so investors know exactly what standards they need to meet and what support they can expect.

The Environment Agency and Natural England will retain their non-water remits and responsibilities.