The UK government has said it will make an unprecedented intervention in how water bills are set and how water companies prioritise investment, directing firms to focus on value for money for customers and to take stronger action to reduce leaks and sewage overflows.
Environment Secretary Angela Eagle informed suppliers operating in England and Wales that ministers intend to step into the next price review, which is normally conducted by the industry regulator, Ofwat. The move signals a direct ministerial role in shaping the terms of the forthcoming regulatory settlement.
Ministers said the next review must require companies to bring down costs for customers and to take measurable steps to stop leaks and prevent sewage from being discharged into waterways. The intervention is framed around delivering better outcomes for consumers and the environment by altering how investment priorities are set.
Ofwat is responsible for setting price controls and determining how much companies can charge their customers; the government’s intervention is therefore notable for its potential to influence those regulatory processes. Officials say the aim is to ensure that the regulatory framework delivers clearer value and improved performance on infrastructure and pollution.
The decision to intervene comes amid public concern about water quality and household bills, and will require firms and the regulator to reconcile investment plans with tighter expectations set by ministers. Government officials and industry leaders will now enter discussions on how to translate the directives into the formal parameters of the next price review.