Damning review of water industry finds 'deep-rooted, systemic' failures

THE WATER sector is beset with "deep-rooted, systemic" failures, and needs fundamental reform of laws, regulation and infrastructure, a review has warned.

- PRESS ASSOCIATION REPORTERS

The Independent Water Commission was tasked by the UK and Welsh governments to carry out the largest review of the sector since privatisation in the face of widespread public anger over pollution, bills and bosses' bonuses, although ministers ruled out nationalising water companies.

Its interim report has been published as Britain's biggest water company, Thames Water, is again facing the spectre of temporary nationalisation after private equity firm KKR pulled out of plans for a £3bn bailout.

Another of England's private water firms, South West Water, reported widening financial losses after an outbreak of a parasite in water supplies cost it millions.

And water supplies are under pressure after the driest spring in decades has left farmers struggling and millions of households facing the possibility of hosepipe bans, while ministers have warned that climate change, a rising population and crumbling infrastructure is putting future supplies at risk.

In the interim report, published yesterday, the commission said multiple issues needed to be tackled to rebuild public trust in the ailing sector.

It called for regulator Ofwat's role to be strengthened and for the watchdog to adopt a more “supervisory” approach to oversight of water firms.

Former Bank of England deputy governor Sir Jon Cunliffe, who led the review into the water sector in Wales and England, told the BBC that more effective regulation was a huge part of solving the problem, with a regulator that could step in early before things got worse.

He said: "Because when they get worse, as you can see, they are very difficult to sort out, and we need an environmental regulator with the capability to monitor and enforce."

He also said that having regulators with different remits and responsibilities for different parts of the process had made the water system “expensive and incoherent”.