Written by Ellie Roxburgh, Policy and Advocacy Manager at River Action
This Government’s focus on reforming the water sector is welcome and timely. Recent failings by South East Water and Thames Water have demonstrated that water companies are defective on multiple fronts. The public is mobilised for change and the Government must go further than minor tweaks to the status quo. The current model of profit-driven privatisation has failed, evidenced by the polluted state of our rivers, exploitative ownership models and inadequate regulatory oversight in the water sector. The water pollution caused by agricultural practices, industrial waste and road run-off must also be urgently recognised and addressed.
The time for change is now. We need a government that is bold in ambition and willing to implement reforms fast enough to deliver the measurable improvements needed to fulfil its election promise to clean up our rivers, lakes and seas.
So, what is a White Paper?
A White Paper is a government document that precedes legislation. It sets out what to expect in the upcoming King’s Speech when the parliamentary agenda is laid down by the King. This White Paper focuses largely on the recommendations made by Sir Jon Cunliffe’s Review of the water sector in 2025. Below, we’ve set out the good, the bad and the ugly of the government’s plans for water reform.
The Good
Tough, independent regulators: For too long, water companies have gotten away unscathed with polluting our rivers. Today’s announcements put some strength into the regulator, including no-notice powers for the regulator to check security and emergency preparedness, Performance Improvement Regimes for failing water companies, and a Chief Engineer to monitor infrastructure.
The government announced a consolidation of water industry regulators into one entity, with oversight of all sectors impacting the water environment. This new regulator will have public health and environmental protection as a key objective, alongside affordable bills, financial resilience of the water sector, and robust oversight of water companies’ infrastructure. This regulator must have enough teeth to hold water companies to account with penalties that stop them polluting. We need a regulatory system that enforces the law and, to do that it must be well-financed.
Democratic decision-making: The government has committed to introducing a regional water planning function by bringing together councils, water companies, farmers and developers, with double the funding for catchment partnerships. The cross-sectoral and target-driven characteristics of the new regional water planning function are welcome. However, while it is important that these actors have a seat at the table, there needs to be an independent authority that makes decisions based on the environmental health of the catchment and the public health of customers.
These authorities need to sit above water companies and other self-interested actors. They need powers to influence local planning authorities decisions over industrial planning applications and permit decisions, based on the ecological health of the river and surrounding habitats. Regional oversight should support a tiered approach to action on water pollution, whereby the most affected areas are prioritised as the focus of rapid action and enforcement (including Scientific Sites of Scientific Interest and chalk streams). This would enable the Secretary of State to enact Water Protection Zones and a potential moratorium on industrial livestock units in areas, such as the River Wye, that are experiencing significant nutrient loading from industrial agriculture.
A long-term water strategy: We are pleased to see the Government taking a long-term view of improving the water sector. However, decisions at local and regional levels must align with and enable the delivery of a national strategy for planning, financing, governing and regulating sewage treatment, water quality and supply to ensure a joined-up approach to securing water and clean rivers, lakes and seas. Measures and targets should be put in place to deliver on commitments within the Environmental Improvement Plan and Water Framework Directive across sectors and regions, to require all actors to contribute towards achieving national targets.
Abolition of self-monitoring: The government has committed to abolishing the self-monitoring of water companies. The White Paper has set out plans for the new regulator to have a Chief Engineer to monitor infrastructure, and for water companies to proactively report on infrastructure conditions. The test will be how regularly the regulators independently test the infrastructural quality and environmental impacts of water company operations.
The Bad
Limited scope on sewage sludge: While we welcome the Government’s commitment to consult on reforms on how sewage sludge use in agriculture is regulated and whether sludge should be included in the Environmental Permitting Regulations, meaningful action is needed that goes beyond end-of-pipe solutions. The Government should investigate whether legislation is needed to stop water companies from selling contaminated sludge to farmers, and as recommended by the Independent Water Commission, the Government must consider Extended Producer Responsibility for all of the contaminant producers across the supply chain.
Nothing new on agricultural water pollution: Agricultural water pollution is on a similar scale to water company pollution and the White Paper recognises this, estimating around 40% of river and groundwater pollution is due to agricultural practices. Yet agriculture has not had equivalent dedicated resources to identify and implement solutions to reduce environmental harm as the water sector. Consolidating agricultural water regulations is welcome, but we also need to see more funding for regulators, greater support for farmers to implement much-needed infrastructure, and a planning system that is empowered to decide when catchments have enough industrial farms. It is critical that environmental permitting is extended to industrial cattle and moves to do this must be swift.
The Ugly
Essential requirements instead of incentives: Today’s announcements start to embed public health and environmental protection in the water system with targets and objectives. Reform of the incentive framework to reward companies for delivering outcomes like public health, the environment and long-term resilience means these outcomes will continue to be seen as optional when they should be essential requirements of operating.
Continued prioritisation of private interests: Regulation alone cannot fix a deeply privatised system that is designed to put profit first. The White Paper recognises some owners have prioritised “short-term profits over long-term resilience and the environment”. That is exactly why the ownership model must change. However, the White Paper still treats the profit-driven model as the default and focuses on constraining its worst excesses. The approach to ownership change is optional and company-led, which means it is very unlikely to happen. Most critically, the White Paper makes no commitment to a thorough, evidence-led review of alternative ownership models. We want to see a clear move toward public benefit models for water companies, not a slightly better managed private monopoly. A public benefit model would mean that water companies have legal duties to put public health and the environment first, profits and shareholder dividends are secondary, and short-term extraction is ruled out.
And what if water companies continue to fail financial and legal obligations?
New legal powers may be valuable, but the Government and regulator must use the extensive and powerful ones they already have. Performance Improvement Regimes are a step in the right direction, but the Special Administrative Regime has existed under the Water Industry Act 1991 for decades and must now be used by the Government and regulator. When a water company fails to meet its financial or legal obligations, as is unfortunately the case with more than one water company and with Thames Water being the clearest case for such an intervention. The commitment in the White Paper for water companies to establish plans for special administration is welcome, but transparency on when the regime will be triggered by the regulator and the Environment Secretary remains lacking.
Reforming the water environment requires bold and urgent action. We need to see the Government follow through on its reforms with greater ambition.
