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A new commission is to investigate Britain’s troubled water industry in a bid to tackle sewage pollution, “broken” infrastructure, and toughen up weak regulators.

The new Independent Water Commission will deliver the “largest review of the sector since privatisation”, the UK and Welsh governments said as they unveiled the plans.

Campaigners have warned against trade-offs between attracting investment, keeping bills affordable and protecting the environment.

It comes amid widespread anger at sewage-polluted waterways, water company bonuses and long-term failures to build new assets like reservoirs and sewers.

All 11 wastewater companies in England and Wales have this year been investigated by one of the public regulators, Ofwat, over mismanagement of their networks.

But the commission will also investigate how to reform the regulators themselves, amid concerns they lack resources and bite and have overseen private company profit despite record pollution levels.

It could even consider scrapping Ofwat and reforming the Environment Agency.

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Work continues on the construction by Southern Water of a new 1km outfall pipe at which runs from Swalecliffe Wastewater Treatment Works in Kent out into the North Sea. 11 water firms in England and Wales are under scrutiny by Ofwat as part of its major investigation into whether their sewage treatment works are polluting the environment. Picture date: Tuesday July 16, 2024.
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Water companies have been accused of underinvesting in new infrastructure while pocketing bonuses and shareholder payouts. Pic: PA

In December, water companies and the regulator will decide by how much to hike bills in order to fix some of these problems, with water firms on Tuesday requesting an even greater bill increase than had been expected.

Environment Secretary Steve Reed said: “Our waterways are polluted, and our water system urgently needs fixing.”

The water commission will “attract the investment we need to clean up our waterways and rebuild our broken water infrastructure”, he added.

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Water bills to rise by £19, interim decision in July found

Mr Reed has ruled out renationalising the water industry to tackle pollution.

The new body will be chaired by former deputy governor of the Bank of England Sir Jon Cunliffe.

His findings, due in the second quarter of next year, will not be binding but inform further legislation to attract long-term investment and clean up the country’s filthy rivers and seas.

The Liberal Democrats, which has a base in rural constituencies and has made water issues a priority, said “more urgency” was needed.

Its environment spokesperson Tim Farron said: “Whilst a review of the industry is welcome, it should not be used as a tool to kick the can down the road on immediate reforms.”

The government should already be introducing “a new regulator with real teeth and power to get hold of these profiteering firms”, he said.

It follows earlier announcements by the new government to ringfence cash for infrastructure upgrades, and hike prison time and fines for polluting water company bosses.

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The government is concerned a lack of infrastructure is holding back growth, with lacking sewage or water infrastructure holding back new homes in Oxfordshire and Cambridge.

CEO of campaigning group River Action, James Wallace, called the steps “encouraging”.

But he warned, “water security and wildlife must not be sacrificed for growth and international investment”.

Greenpeace said the move was “long overdue” but needed to balance the demands of investors with a commitment to properly enforce environmental regulation.

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Water companies blocked from using customer cash for ‘undeserved’ bonuses

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Water companies blocked from using customer cash for 'undeserved' bonuses

Nine water companies have been blocked from using customer money to fund “undeserved” bonuses by the industry’s regulator.

Ofwat said it had stepped in to use its new powers over water firms that cannot show that bonuses are sufficiently linked to performance.

The blocked payouts amount to 73% of the total executive awards proposed across the industry.

The regulator has prevented crisis-hit Thames Water, Yorkshire Water, and Dwr Cymru Welsh Water from paying £1.5m in bonuses from cash generated from customer bills.

It said a further six firms have voluntarily decided not to push the cost of executive bonuses worth a combined £5.2m on to customers.

Instead, shareholders at Anglian Water, Severn Trent, South West, Southern Water, United Utilities and Wessex will pay the cost.

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David Black, chief executive of Ofwat, said: “In stopping customers from paying for undeserved bonuses that do not properly reflect performance, we are looking to sharpen executive mindsets and push companies to improve their performance and culture of accountability.

“While we are starting to see companies take some positive steps, they need to do more to rebuild public trust.”

The announcement came in an Ofwat update on firms’ financial resilience and bonuses.

Industry lobby group Water UK said: “Almost all water company bonuses are already paid by shareholders, not customers.

“All companies recognise the need to do more to deliver on their plans to support economic growth, build more homes, secure our water supplies and end sewage entering our rivers.

“We now need the regulator Ofwat to fully approve water companies’ £108bn investment plans so that we can get on with it.

“Ofwat’s financial resilience report provides yet more evidence that the current system isn’t working, with returns down to 2% and eight companies making a loss.

“It is clear we need a faster and simpler system which allows companies to deliver for customers, the environment and the country.”

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Google could be forced to sell its Chrome browser over internet search monopoly claims

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Google could be forced to sell its Chrome browser over internet search monopoly claims

Google must sell its Chrome browser to restore competition in the online search market, US prosecutors have argued.

The proposed breakup has been floated in a 23-page document filed by the US Justice Department.

It also calls for lawmakers to impose restrictions designed to prevent its Android smartphone software from favouring its own search engine.

If the rules were brought in, it would essentially result in Google being highly regulated for 10 years.

Google controls about 90% of the online search market and 95% on smartphones.

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Court papers filed on Wednesday expand on an earlier outline for what prosecutors argued would dilute that monopoly.

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Google called the proposals radical at the time, saying they would harm US consumers and businesses and shake American competitiveness in AI.

The company has said it will appeal.

The US Department of Justice (DoJ) and a coalition of states want US District Judge Amit Mehta to end exclusive agreements in which Google pays billions of dollars annually to Apple and other device vendors to be the default search engine on their tablets and smartphones.

Google will have a chance to present its own proposals in December.

A trial on the proposals has been set for April, however President-elect Donald Trump and the DoJ’s next antitrust head could step in.

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Dozens of partners take early retirement from accountancy giant PwC

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Dozens of partners take early retirement from accountancy giant PwC

Dozens of partners at PricewaterhouseCoopers (PwC), Britain’s biggest accountancy firm, will next month take early retirement as its new boss takes steps to boost its performance.

Sky News has learnt that PwC’s 1,030 UK partners were notified earlier this week that a larger-than-usual round of partner retirements would take place at the end of the year.

Sources said the round would involve several dozen partners – who command average pay packages of about £1m – leaving the firm.

PwC named about 60 new partners earlier this year under Marco Amitrano, who was appointed as its new UK boss in the spring.

Mr Amitrano is understood to have informed partners about the changes in a voice memo, although one insider disputed the idea that the numbers involved were “significant”.

The partner retirements come as the big four audit firms contend with a sizeable bill from increases in the Budget in employers’ national insurance contributions.

It emerged this week that Deloitte is cutting nearly 200 jobs in its advisory business, according to the Financial Times.

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An ongoing shake-up of the audit profession is not being restricted to the big four firms, with Sky News revealing on Wednesday that Cinven, the private equity firm, was in advanced talks to buy a controlling stake in Grant Thornton UK.

The deal, which is expected to value Grant Thornton at somewhere in the region of £1.5bn, was announced on Thursday morning.

PwC declined to comment.

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