A new report says water reform must be a priority for the next government and that it should commission a comprehensive, independent review of water management, to report within its first twelve months.

The report published today - A Fresh Water Future – is an independent review of water sector performance and governance and a co-created expert, stakeholder and public vision for future water management in the UK.

Polling for the report via a nationally-representative poll of over 4000 people shows 81 per cent of people are concerned about the health of the environment. The majority believe it is getting worse and that water is central to this. Three quarters of the public consider government must bear responsibility for action. Three quarters of water experts consider stronger policy and regulation is critical to solving water challenges. Over three quarters of people say water reform should be a, or the priority for the next government.

"Widespread system and governance issues at the root of current water pollution and resilience challenge"

The report says:

“There are widespread system and governance issues at the root of the current water pollution and resilience challenge that need detailed review beyond the capacity of this project. Water’s regulatory framework is based around decades-old pressures and drivers. It has evolved over time into a complex and at times conflicting set of drivers, checks and balances.”

The report, which was facilitated by the Chartered Institution of Water and Environmental Management, sets out a series of major recommendations, including:

The next government should commission a comprehensive, independent review of water management, to report within its first twelve months

There are widespread system and governance issues at the root of the current water pollution and resilience challenge that need detailed review beyond the capacity of this project. Water’s regulatory framework is based around decades-old pressures and drivers. It has evolved over time into a complex and at times conflicting set of drivers, checks and balances.

Pressures on the water environment have changed and grown over this time and their management needs extend across government. The configuration and prioritisation of this framework, the organisations who deliver against it and their capacity to do so needs thorough review to ensure it is fit for purpose.

The Cabinet Office should commission an independently-chaired review to report inside the first 12 months of the next government’s term. This will enable recommendations to be implemented across the remainder of the term.

We recognise an independent review of water will come to its own findings and recommendations. However, this work has identified the following as priorities for improved water management. We urge the next government to make these changes swiftly, bringing about a confident transition to a bolder approach to water management against which investment and finance can be mobilised.

Review, and if necessary reform, regulators so that they can discharge their responsibilities effectively

The report says environmental and economic regulators of water activities have struggled to keep on top of the performance of the industries they regulate. More sectors need to be brought into the permitting regime (e.g. dairy) and regulators need more powers and resources to take action on sectors which are not regulated by permits.

Regulators should be independently reviewed through the overarching review of water management to ensure that their scope, resource and capacity is appropriate to the range of activities they are required to regulate.

Practitioners are clear there must be a clear increase in regulatory capacity to drive an expectation amongst all regulated activities that environmental performance will be monitored through a robust process and infringements enforced. Operator self-monitoring of wastewater performance should be paired with robust inspections at least as frequent as before self-monitoring was introduced.

Reform governance and regulation of water companies to create purpose-led organisations, transparent and compliant with the law

A Defra-led water assurance taskforce should be established to fully review and drive forward reform of water company performance and transparency as a means to restore public confidence and the industry’s social licence to operate.

This should have the remit to establish baseline corporate governance standards which reposition water companies as purpose-driven organisations, focused on public purpose, as a condition of their license. This should be built around priorities of a fair price for water, resilience, service reliability, customer and employee engagement and involvement, sustainability and environmental performance, corporate structure and ‘open book’ transparency.

Action is required to ensure that investors take a long term view, rather than milking companies for short term dividends, or stripping their assets. Once achieved, this should enable a move towards a more outcomes-based approach to regulation and companies to be able to position themselves as an attractive, long-term green investment.. The regulator Ofwat should also be given duties reflecting this range of purpose.

If the cost to water companies of performance improvement and compliance results in their failure, then the findings of the independent review should inform how they might be constituted (in terms of structure and financing) in future. Consistent and comprehensive support for people struggling to afford their bills is sorely needed to help the affordability of investment as the water infrastructure challenge grows.

Invest in maintaining water systems so infrastructure upgrades endure

Many current water challenges are exacerbated by chronic under-investment in infrastructure maintenance. The next government must regulate for considerably more investment in ongoing maintenance to ensure adequate upgrade and replacement of sewers, water mains and other existing water assets.

Telemetry, data organisation, cleansing and interrogation to monitor and understand asset condition and target maintenance, can potentially unlock significant improvements in water network condition and asset efficiency. This will be necessary to improve the current poor overall picture of asset condition and maintenance need.

Water running off urban hard surfaces particularly roads, carparks and industrial estates can be highly toxic to the rivers, streams and lakes it drains into, often with minimal or no treatment. Highways authorities should be required to survey their drainage networks for their condition and maintenance need. They should be resourced to deliver a minimum maintenance schedule.

Click here to download the report in full A Fresh Water Future