The watchdog for the water industry is set to be scrapped as Labour faces mounting pressure to fix the sewage crisis in Britain’s rivers, seas and lakes.
Ministers look set to abolish Ofwat amid growing calls for a “complete overhaul” of failing regulators that have presided over a hike in the worst type of sewage spills.
It is currently unclear how far the overhaul – in response to an independent review of the water sector that will be published on Monday – will go.
Sources told The i Paper the regulator could be scrapped in name only or merged with parts of the Environment Agency.
But the move marks a victory for The i Paper’s Save Britain’s Rivers campaign, which has called on ministers to reform the water industry regulators.
TV presenter Chris Packham, who backed the campaign, welcomed the plan to scrap Ofwat.
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“It’s something we’ve called on for a long time… what we need here is significant change.”
The naturalist said a “regulator with some teeth” could hold to account water companies who pump sewage into waterways.
Packham added: “You couldn’t make it up. I hate to say it, but [water companies] frankly don’t give a shit.
“We need to start from scratch and get some proper regulation in place.”
Ofwat, the economic regulator, has been widely criticised for its role in the sewage scandal, which saw raw waste poured into England’s rivers, lakes and seas 450,398 times last year.
The Government is undertaking a series of measures to clamp down on water companies. However, on Friday it emerged that “serious pollution incidents” were up 60 per cent compared to the year before.
James Wallace, CEO of River Action, said the latest figures “expose a brutal truth”.
“Serious pollution incidents are rising, sewage discharges remain rampant, and our rivers are spiralling toward ecological collapse. This is not just regulatory failure; it is a national disgrace.”
Ofwat has been blamed for allowing water companies to pay huge dividends to shareholders and accrue large debt piles while failing to invest in the infrastructure required to prevent spills.
It is currently unclear exactly what scrapping Ofwat will mean for how the water industry is regulated going forward.
One source told The i Paper that the regulator could be abolished in name only, comparing it to when the Financial Services Authority (FSA) was replaced with the Financial Conduct Authority (FCA) following the financial crash.
Ministers are also rumoured to be considering merging Ofwat with parts of the Environment Agency (EA) to create a new regulator that is responsible for financial and environmental regulation.
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Read MoreWallace said: “We’ve seen Ofwat fail to undertake its regulatory duties, and it makes sense to combine financial and environmental regulation into one body and simplify the enforcement of the law.”
Henry Swithinbank, the policy and advocacy manager at Surfers Against Sewage, said it was “clear that the regulators aren’t working as they currently exist”, but “didn’t have a strong view” on whether Ofwat and the EA should be merged.
It has previously been suggested that ministers should create a single “super regulator” that merges the environmental duties of the EA, with the financial duties of Ofwat.
“What is crucial is that both of those regulators, or one of those regulators, should have a primary duty to protect public health again, rather than just securing a return for investors,” Swithinbank added.
The i Paper’s Save Britain’s Rivers campaign has called for the regulators to be overhauled and for Ofwat to be given a “green duty” that will force it to place greater emphasis on the environment when making decisions over water companies’ business plans.
Mark Lloyd, CEO of the Rivers Trust, said the “muddled” regulation of water firms “is the root cause of many of the issues with the sector”.
He said reform of the existing regulators might not work as “public bodies are slow to change”, but warned creating a new regulator could be “disruptive and long-winded”.
“Whichever solution the Government chooses, the water industry must have a regulator with the necessary resources and powers to ensure that the environment and our drinking water are protected and safe,” he said.
The scrapping of Ofwat is expected in response to the final report from an independent review of the water industry led by former Bank of England deputy governor Sir Jon Cunliffe.
On Monday the commission will publish its final report, which will set wide-ranging reforms for the water industry.
However, ministers forbid the commission from considering public ownership of water companies, a decision that has attracted criticism from some campaigners.
Ofwat and the Government declined to comment.
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