Resetting the water sector: Ofwat to be abolished

Waterscan welcomes bold reform and recognition of Self-Supply customers saving over 3 billion litres of water

The Independent Water Commission, chaired by Sir Jon Cunliffe, has today published its final report — marking the most significant reform of the water sector in over 30 years.

Shortly after the report was published, the government confirmed it will abolish the water regulator, Ofwat.

With 88 wide-ranging recommendations, the report sets out a clear agenda for delivering a more transparent, resilient and customer-focused water industry across England and Wales. Waterscan welcomes the report’s ambition and its alignment with many of our own recommendations submitted during the Commission’s call for evidence.

Key headlines:

• A single integrated water regulator to replace Ofwat, the Environment Agency’s water responsibilities, and the Drinking Water Inspectorate in England — streamlining oversight and improving environmental and public health outcomes.
• Eight new regional water system planning authorities will be created in England (and one in Wales), empowering local areas to direct future investment — nearly £50bn — and give communities a stronger voice.
• Greater consumer protection, including a new ombudsman for customer redress and a social tariff for vulnerable users.
• Stronger environmental regulation with recommend compulsory metering, improved monitoring (via digitalisation and third-party assurance), stronger standards on abstraction, sludge, and reuse, and a new legally binding target for the water environment.
• Tighter regulation of company ownership, governance and finances, alongside strengthened asset health, mapping, and resilience standards.
• Introduce public health reforms, including objectives in water legislation, ensure public health representation on regional water bodies, and tackle emerging pollutants to protect those using water for recreation.
• A national water strategy to provide long-term clarity and direction from government, setting out cross-sector priorities and trade-offs.

Waterscan’s role in shaping reform

Waterscan’s submission to the review highlighted critical areas in need of reform to unlock the full potential of the water market. We’re encouraged to see our proposals reflected in the final recommendations, particularly in:

• Independent complaints resolution – The report backs a new consumer ombudsman, addressing long-standing issues in dispute handling that we highlighted.
• Smarter metering – The Commission’s focus on digital transformation aligns with our call for smarter, more accessible water data and third-party metering responsibilities.
• Inclusive innovation funding – Current funding mechanisms favour incumbents. We urged the Commission to open access, and the report acknowledges the need to support a more diverse and competitive innovation ecosystem.

Recognition for Self-Supply: Real-world impact

Waterscan is especially pleased to see the Self-Supply community directly recognised in the report. As of March 2024, 16 Self-Suppliers operating in the market accounted for 2.5% of total retail market consumption. These organisations are demonstrating that empowered customers can drive efficiency, reduce cost, and deliver environmental gains.

In 2023–24 alone, Self-Suppliers reported a water saving of 3 billion litres — a remarkable achievement that reflects the effectiveness of the Self-Supply model.

Looking Ahead

These reforms offer a once-in-a-generation opportunity to reset the water sector for the better. At Waterscan, we remain committed to:

• Championing transparency and accountability
• Supporting our customers to be leaders
• Advocating for a market that is open, competitive, and fair for all.

Useful links

Independent Water Commission- Final Report

Government press release – ‘Roadmap to rebuild trust in water sector unveiled in major new report’