'Nowhere to hide' for water companies, vows government in industry shake-up

The creaking water industry is set for a "once-in-a-generation set of reforms", the government has said as it proposes new legislation to overhaul the system.

Nightmare situations such as taps running dry in Kent and Sussex this month would be avoided, the government says, thanks to a new proactive system that would perform "MOTs" on water companies to preempt major failures.

Ministers are set to unveil a series of reforms in parliament on Tuesday as they move ahead with a major shake-up in the industry in England and Wales, including abolishing the current system of overlapping regulators.

Public confidence in the old way collapsed as sewage spills grew and pipes crumbled, while water company bosses enjoyed ever bigger bonuses.

The new plans, outlined in a White Paper on Tuesday, would create a single regulator, as well as an ombudsman to make it easier for bill-payers to complain about their suppliers.

The government has already committed to a ban on bonuses for poor performing executives. These reforms are wider and include "no notice" surprise inspections.

But campaigners and the water industry have warned the proposals won't come in soon or reach far enough.

'Nowhere to hide'

Environment Secretary Emma Reynolds called the proposals a "once-in-a-generation set of reforms" to tackle water pollution and "poor performance by water companies".

Under the government's proposals, water companies will have to perform health checks on their infrastructure to proactively identify problems with pipes or sewage treatment works before they fail.

A new chief engineer at the regulator will also bring back hands-on checks of infrastructure, something not seen for 20 years.

Ms Reynolds told Sky News: "We're going to move away from a system whereby water companies mark their own homework to having a new regulator - abolishing Ofwat - with more teeth, so that there'll be nowhere to hide for poor performance."

She called the situation in Kent and Sussex that left 30,000 homes without water "totally unacceptable".

The reforms would "enable the regulator to more closely monitor what's happening in individual water companies", such as South East Water, she added.

Change 'desperately needed'

It comes as complaints to the consumer body, the Consumer Council for Water, rose 50% in the last year and it said trust hit an "all-time low".

Its chief executive Mike Keil said: "The miserable disruption inflicted on people in parts of Sussex and Kent in recent weeks underlines why meaningful change in the way water companies are regulated and treat their customers is desperately needed."

He welcomed the proposed new ombudsman, which would have legal powers to resolve disputes and force water companies to compensate for issues.

Government urged to tackle 'root cause of crisis'

The planned changes come as part of the government's response to public fury over rising bills, sewage pollution and large payouts for executives.

Last year it commissioned an independent review that made 88 recommendations to repair one of the world's only fully privatised water systems.

But it ruled out re-nationalisation of the water industry, which it sees as too expensive and disruptive, but which some campaigners say is the only solution.

James Wallace, CEO of River Action, said the government "recognises the scale of the freshwater emergency, but lacks the urgency and bold reform to tackle it".

He said none of the proposals would "make a meaningful difference" without tackling privatisation, which is the "root cause of this crisis".

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Water companies also warned the changes might come in too slowly. The government expects them before the next general election, but can't yet put a date on it.

A spokesperson for the industry body Water UK said: "The need for major reform has long since been agreed. Delivery now needs to catch up."

The proposals so far were also light on reforms to other sectors that pollute Britain's waterways, such as farms, housing, and roads - though more detail is expected in the White Paper on Tuesday.

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