The Clean Water Bill is coming: here’s what needs to happen

Whilst we await the as yet un-revealed “Clean Water Bill”, it is time to take stock and consider whether the Government’s view that the “system is broken” is in fact correct. 

The much-fanfared Cunliffe Review interim and final reports on the future of the water industry followed by a vague set of suggestions in the White Paper, are disappointing and concerning in equal measure.[1] They seem to miss the point of what is really wrong with the water industry and put forward proposals that are unworkable, overly ambitious and, frankly, daft. 

Just to recap, the Review and White Paper say re-nationalisation of the water industry is off the cards. All our water-woes would instead be remedied by abolition and reconstruction of the regulatory regime.

Ofwat, currently on the naughty chair, would be banished along with the (respected and successful) Drinking Water Inspectorate to be replaced by a super-regulator. The new super-regulator would then be tasked with the combined economic and environmental functions (with all the potential conflicts of interest and purpose). The water and sewage regulation/ permitting functions would be taken away from the poorly performing EA and NE. 

There were some more sensible suggestions (which seemed to mirror what we had been saying in our campaigns) including dispensing with the controversial system of “Operator Self-Monitoring” or OSM (whereby water companies mark their own homework) and the introduction of a “regional element within the new regulator to ensure greater local involvement in water planning”, plus the switch to publication of real time water company data and making water companies statutory consultees for planning applications. 

But overall, it seems that the promise to “move faster and further” has slowed to a less furious pedestrian speed.  The freshly renamed “Clean Water Bill” that is yet to appear in print, gets a brief mention in the King’s Speech with a short note to back it up.[2] 

The ambitions appear slightly more restrained than they were heralded by Cunliffe – which is perhaps due to a calmer understanding of the weight and expense of the changes proposed by Cunliffe for which no methodology has yet been provided. 

The real failing in the review and the White Paper is the assumption that failures of compliance with the law are really failures of the law. The industry, we are informed, is over-regulated which hinders growth. Such an assumption has led to the “risk-based approach” to regulation and enforcement. Reliance on the new and vague concept of “constrained discretion” is an example.[3] 

Whilst these jingoisms seem impressive and sensible, the truth is that Ofwat and the EA have been waving the carrot and not the stick for years. The real problem is not with over-regulation but a real lack of commitment to investigate and enforce using existing regulatory powers. 

Another real concern for those charities fighting for water health is the on-going assault on the Water Framework Directive (WFD) – legislation which should be the backbone of environmental planning for the water environment.  As with Cunliffe, the argument from government is that because targets have not been met, there must be something wrong with the law, so it needs changing.  

But what seems to be lacking overall are details on how and what will be done to meet the very high-level slogans of the White Paper. 

That means questions over how so many changes can be made are left unanswered.  Ofwat is a creature of the Water Industry Act 1991 (WIA). Cobbling together a new regulatory body may well require a complete overhaul of the WIA and the Water Resources Act 1991 (WRA), not to mention amendments to myriad related laws (Environmental Permitting Regulations, Environment Act1995 and so on). The “how” and “when” of the changes is unclear. And that does not even consider how the cross-border issues with Wales and Scotland will be resolved.

The promised aims of the Cunliffe Review are for outcomes to be “practical and deliverable”. But they are neither.

That is why we have written to the Secretary of State, at a time when the promises have stalled, to suggest more workable alternatives rather than the uncertainty and chaos of the review and the White Paper.

Read our letter to the Secretary of State in full here. Find our original evidence to the Cunliffe Review last year, here.

Footnotes 

1. https://assets.publishing.service.gov.uk/media/687dfcc4312ee8a5f0806be6/Independent_Water_Commission_-_Final_Report_-_21_July.pdf
2. https://assets.publishing.service.gov.uk/media/6a046665c0cc74b4523e4d3b/The_King_s_Speech_2026_-_background_briefing_notes.pdf
3. The Water White Paper uses some unfathomable and imprecise language to describe its intentions: “We will therefore embed the concept of ‘constrained discretion’ into the reset of water regulation. The aim of constrained discretion is to empower the regulator with greater flexibility to support improved outcomes for people, the environment, and economic growth, within appropriate constraints set out in legislation. For example, a regulator that is more empowered to regulate on outcomes, rather than process, will be more able to prioritise sewage treatment works upgrades where they will have most impact and consider where a change in approach may remove regulatory barriers to the use of nature-based solutions.”

By: Justin Neal

Solicitor