One former senior Ofwat official said the doomed water watchdog failed to take the sewage scandal seriously – agreeing with environmental activists that regulation had been a “shitshow”.
Environment Secretary Steve Reed confirmed on Monday that Ofwat, the water regulator for England and Wales, will be scrapped in an overhaul of a “broken” system.
Sewage spills have soared under Ofwat’s watch in the past decade. Discharges into England’s waterways came to a record 3.6 million hours in 2024, up from around 100,000 hours in 2016.
“Anything that wasn’t about driving efficiency and driving bills down for customers had no place in Ofwat’s thinking,” they said.
They added: “If you looked at the amount of money coming into the sector, and going out of the sector, the water companies did have money to invest more.
Caption: Sewage outflows, such as this one into the River Thames in south east London, have regularly been used during periods of heavy rainfall (Photo by BEN STANSALL/AFP via Getty Images)
Dr Martin Hurst, a former No 10 water policy advisor, was a senior official at Defra from 2007 to 2015 – spending several years at the environment department as water director.
He said the economic water regulator had “allowed under investment and had insufficient oversight on what water companies were doing”.
He added: “Looking back, when you had cheaper borrowing and healthier water companies, we should have made sure the companies invested much more in the long-term assets. It’s come back to haunt us. It was a failure of the entire system.”
Last week, it emerged senior staff at the public body put over a dozen international flights on expenses in recent years – despite the watchdog being solely focused on the UK.
There were also repeated concerns about the “revolving door” of top executives moving between Ofwat and the water companies prevented the regulator taking tougher action.
Caption: Record levels of sewage dumping have led to public outrage (Photo by Vuk Valcic/SOPA Images/LightRocket via Getty Images)
Dr Kevin Grecksch, a leading water policy expert at Oxford University’s School of Geography and the Environment, thinks the “merry-go-round” relationship “just shouldn’t have happened”.
He said: “For the water companies, it’s been like owning an ATM. Profit has been guaranteed.
The former Ofwat official told The i Paper there had been “a lot of movement” between the regulator and water the companies “in both directions”, adding: “It wasn’t seen as an issue. It wasn’t an organisation that asked questions of itself.
“I’m mildly optimistic it will get better under a new regulator – partly because it can’t get much worse. Just getting everyone under the same roof won’t work unless the new regulator is given a very clear mandate.”
The review recommended a radical shake-up so that Ofwat, the Drinking Water Inspectorate (DWI) and the part of the Environment Agency which monitors water pollution are replaced by a single “joined-up” and “powerful” regulator.
Caption: Environment Secretary Steve Reed announced Ofwat will be scrapped following recommendations made by the Cunliffe report (Photo by Leon Neal/Getty Images)
Criticism of Ofwat has been fierce in the wake of the damning review. Gary Carter of the GMB union said Ofwat had overseen a “disgrace”, of crumbling infrastructure, polluted rivers and rising bills while “fat cat bosses get rich”.
But there is a cautious welcome about the plan to bring the economic and environmental regulation together.
“Doing something radical to make regulation stronger and more nimble is very sensible. But I’m nervous that it could lead to a long period of disruption. They need to get on with it quickly.”
The PCS union – which has members in Ofwat, Defra and the Drinking Water Inspectorate – said civil servants were “ready to do their part” in the restructure.
Philip Duffy, chief executive of the Environment Agency, said the “merger” between regulators could help ensure more is done to prevent pollution.
“On structure, none of us who have worked in the regulation of the water industry in recent years would defend the current system,” added Duffy, saying it will be “vital to get the detail right”.
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