Lords criticise Government’s ‘lack of leadership and deep-rooted complacency’ following water industry inquiry

In a letter to Thérèse Coffey MP, Secretary of State for Environment, Food and Rural Affairs, the cross-party committee has set out a number of conclusions and recommendations on a range of issues including: investment and bills; financial resilience; wet wipes; future water supply; and regulatory powers and resources.

While the committee acknowledges changes in water policy and regulation since its March 2023 report: ‘The affluent and the effluent: cleaning up the failures of water regulation’, it criticises the “dismissive brevity and complacent tone” of the Government’s response to the report.

In its letter, the Committee:

• warns that continued under-investment in water infrastructure will have serious long-term consequences for the environment and the security of water supplies, risking the possibility of future water shortages;
• expresses doubt that the sector will be able to attract the investment it needs, despite the publication of the National Water Strategy;
• warns that water bills are likely to increase, and expresses disappointment that the Government has not introduced a single social tariff to ensure consistent support for those struggling to pay their bills;
• expresses dismay with delays in banning wet wipes containing plastics, delays which are unnecessary and deeply damaging to the environment;
• concludes that Ofwat and the Environment Agency’s lack of confidence is holding back nature- and catchment-based approaches, in particular in relation to reducing storm overflow discharges;
• concludes that proposals for reducing water demand are insufficient to meet Government targets.

It calls on the Government to:

• set out what action it intends to take to increase investment in the water sector;
• give clear guidance to Ofwat on the balance between investment and the affordability of customer bills ahead of the next Price Review;
• announce its proposals on social tariffs as soon as possible;
• provide long-term, outcomes-based targets for the key areas of investment needed in the sector, particularly in relation to infrastructure investment;
• introduce compulsory water metering;
• set out whether it intends to introduce sustainable drainage requirements in advance of any relaxation of nutrient neutrality rules.

Lord Hollick, Chair of the Industry and Regulators Committee said:

“While the Government has begun to set out its vision for the sector, our cross-party committee has concluded unanimously that there is insufficient policy or drive to meet the Government’s targets. Sadly, the only thing that is becoming clear in the murky, polluted waters of the sewage crisis is a lack of leadership and deep-rooted complacency.

The Government must therefore provide firmer policy detail and greater guidance to regulators, who cannot be left to resolve these huge challenges by themselves. In particular, the Government must give clear guidance on the trade-off between much-needed investment and the level of customer bills. We look forward to the response from the Secretary of State, setting out how she intends to do this.”