Independent Water Commission: report reveals broken British water industry – how it could affect your bills

• Damning review finds ‘systemic failures’ across UK water industry, including pollution and poor infrastructure
• The Water Commission is pushing for a fundamental reset, strengthening Ofwat and prioritising long-term investment
• But water bills likely to rise, as companies seek funds to fix crumbling systems
• Campaigners say consumers shouldn’t bear the cost

From failing infrastructure and pollution scandals, to financial instability and rising consumer costs, the UK's water industry is facing a crisis.

The Independent Water Commission, tasked by the UK and Welsh governments with the largest review of the sector since privatisation in the 1980s, has just published its interim findings.

The Commission’s report highlights “deep-rooted, systemic and interlocking failures” across the water sector. Rivers, lakes, and seas are increasingly polluted due to untreated sewage discharges and ageing infrastructure.

The current regulatory structure is described as “expensive and incoherent”, with multiple bodies holding overlapping and sometimes conflicting responsibilities.

There’s insufficient understanding of the health of critical assets like pipes and treatment plants. Repairs are too often reactive rather than proactive. Companies and shareholders have focused on short-term profits rather than long-term resilience.

Customers are disillusioned by rising bills, sewage leaks, and executive bonuses, especially when these don’t appear to be matched by performance improvements.

The crisis at Thames Water - the UK’s largest water company - illustrates the situation. Facing massive debts, the utility recently saw a £3 billion rescue deal collapse after US private equity firm KKR pulled out. Now, temporary nationalisation looms once again.

But what do the findings mean for the future of Britain’s water industry? And, perhaps more pressingly, what could any future changes mean for the water bills of the average UK resident?

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What might change?

Led by former Bank of England deputy governor Sir Jon Cunliffe, the Commission has stopped short of calling for nationalisation or scrapping Ofwat, the industry regulator.

But it does recommend a “fundamental reset” that includes strengthening Ofwat’s powers by giving the regulator a more supervisory role, with the authority to step in before companies reach crisis point.

Sir Jon said: “There is no single change, no matter how radical, that will deliver the reset the sector needs. We must tackle failures in government planning, regulation, and corporate responsibility simultaneously.”

Successive governments have failed to provide a coherent, long-term vision for water the Commissions says, so it wants it to set a strategic direction that balances investment, environmental protection, and public interest.

Allowing localised governance of water systems could improve responsiveness and resilience, as could encouraging investment from owners who prioritise long-term sustainability over short-term returns.

And the Commission also wants to see better systems developed to monitor, maintain, and renew crumbling water infrastructure.

What it could mean for your water bills

One of the most pressing concerns for households is how these reforms will impact water bills. Unfortunately, the outlook is uncertain - and possibly costly.

Water companies argue they need to raise more capital to invest in fixing broken systems and preventing further environmental damage.

Industry body Water UK says the sector plans to spend £104 billion over the next five years to improve services and protect future supplies. That investment will likely be passed on to customers in the form of higher bills.

Bills were already recently increased in April 2025, with the justification that the funds would go towards upgrading failing infrastructure.

Campaigners argue that households should not be footing the bill for years of corporate mismanagement, pollution, and underinvestment. But without additional government support - or a radical restructuring of funding - consumers may have little choice.

The Commission has not yet proposed direct changes to pricing, but its emphasis on responsible ownership, better planning, and more effective oversight is designed to ensure that future spending delivers tangible benefits.

If reforms restore public trust and reduce costly failures, the hope is that longer-term costs will stabilise.

The final report from the Independent Water Commission is expected later this summer.

The Government has said it will “respond in full” and that it sees this as a “once in a generation opportunity” to overhaul the sector, but whether ministers will implement the bold reforms needed remains to be seen.

Environmentalists are calling for urgency and ambition. Thames Water and others are scrambling for financial lifelines. And consumers are watching closely, wondering whether they’ll pay more—for better service, or just more of the same.

And what’s the environmental cost?

Despite acknowledging the scale of the crisis, environmental groups say the interim review lacks teeth.

Organisations like the Wildlife and Countryside Link, The Rivers Trust, and Surfers Against Sewage argue that the report focuses too heavily on investor confidence and doesn’t go far enough in reforming governance or enforcing environmental protection.

Giles Bristow, head of Surfers Against Sewage, called for an end to “pollution for profit,” adding that the report “begins to recognise systemic issues but stops short of calling for the transformational change needed.”

Others, like River Action CEO James Wallace, said the Commission should study public-benefit water ownership models from other countries to truly prioritise health, nature, and the public good.

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