Britain's water sector 'failing' and needs stronger regulation, damning review finds

is plagued with "deep-rooted, systemic" failures and needs fundamental reform, a major review has warned. Laws, regulation and infrastructure need urgent changes, according to which was tasked by the UK and Welsh governments to carry out the largest review of the sector since privatisation.

The interim report, published on Tuesday, comes amid , bills and bosses' bonuses. Sir Jon Cunliffe, who carried out the review, said: "There is no simple, single change, no matter how radical, that will deliver the fundamental reset that is needed for the

"We have heard of deep-rooted, systemic and interlocking failures over the years - failure in government's strategy and planning for the future, failure in regulation to protect both the billpayer and the environment and failure by some water companies and their owners to act in the public, as well as their private, interest.

"My view is that all of these issues need to be tackled to rebuild public trust and make the system fit for the future. We anticipate that this will require new legislation."

The review called for regulator Ofwat's role to be strengthened and for the watchdog to adopt a more "supervisory" approach to oversight of water firms.

It also urged the Government to provide clearer long-term direction on what is needed from the water system, and warns key elements of current legislation are "badly in need of review and rationalisation".

Giles Bristow, CEO of Surfers Against Sewage, said: "Ending the pollution crisis in our wild waters was an election issue acknowledged on the steps of Downing Street by the Prime Minister Keir Starmer.

"This report clearly identifies a broken privatised water system but stops short on systemic solutions to fix it. Until it is replumbed to prioritise the public health and the environment over profit for investors, an angry public will continue to swim and surf in a deluge of sewage that is destroying our rivers, lakes and coastal waters.

"We need tougher recommendations to government in the final report to help fix this system for good!"

The final report will be submitted in the summer.

Environment Secretary Steve Reed said he had commissioned the water commission to outline recommendations for a "once in a generation" opportunity to transform the water industry and delivered for the public.

"The Government will respond to the Commission in full in due course and outline next steps to benefit customers, attract investment, and clean up our waterways for good," he said.

Downing Street would not be drawn on whether the Government intended to nationalise Thames Water or place the company into special administration following the collapse of a takeover deal.

The Prime Minister's official spokesman said: "We wouldn't comment on the detail of a specific commercial company, but we are obviously monitoring the situation and obviously (there is) no impact on water supply.

"The chairman of Thames Water has said themselves they have got a number of options they are now exploring.
"The Government and Ofwat will be working with them on that in the usual way."

Meanwhile Conservative shadow environment secretary Victoria Atkins accused ministers of having "talked themselves out of" a Thames Water rescue deal.

Ms Atkins told the Commons: "According to a source close to KKR, one of the reasons they pulled out was because they were concerned about negative rhetoric directed at Thames Water and the rest of the industry in recent weeks by the Secretary of State (Steve Reed) and other ministers; in other words, the Secretary of State and his ministers have talked themselves out of this rescue deal."

A Water UK spokesman said: "Everyone agrees that the water industry is not working. We hope this report will be a starting point for the fundamental reforms the sector needs. We need a less complicated system which allows investment to get quickly to where it needs to go.

"In the meantime, companies are focused on investing a record £104 billion over the next 5-years to secure our water supplies, end sewage entering our rivers and seas and support economic growth."