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The system for regulating water companies in England and Wales should be overhauled and replaced with one single body in England and another in Wales, a once-in-a-generation review of the sector has advised.

The report, which includes 88 recommendations, suggests a new single integrated regulator to replace existing water watchdogs, mandatory water metering, and a social tariff for vulnerable customers.

The ability to block companies being taken over and the creation of eight new regional water authorities, with another for all of Wales to deliver local priorities, has also been suggested.

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The review, the largest into the water industry since privatisation in the 1980s, was undertaken by Sir Jon Cunliffe, a career civil servant and former deputy governor of the Bank of England who oversaw the biggest clean-up of Britain’s banking system in the wake of the financial crash.

File pic: iStock
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File pic: iStock

He was coaxed out of retirement by Environment Secretary Steve Reed to lead the Independent Water Commission.

Final recommendations of the commission have been published on Monday morning to clean up the sector and improve public confidence, as bills rise 36% over the next five years. Here are its nine key recommendations:

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• Single integrated water regulators – a single water regulator in England and a single water regulator in Wales. In England, this would replace Ofwat, the Drinking Water Inspectorate and water-environment related functions from the Environment Agency and Natural England. In Wales, Ofwat’s economic responsibilities would be integrated into Natural Resources Wales.

It’s hoped this will solve the “fragmented and overlapping” regulation, and more stable regulation will improve investor confidence. Communications regulator Ofcom was given as an example of how combining five existing regulators into one worked.

• Eight new regional water system planning authorities in England and one national authority in Wales to be responsible for water investment plans reflecting local priorities and streamlining the planning processes.

The new authorities would be independent, made up of representatives from local councils, public health officials, environmental advocates, agricultural voices and consumers. The aim is they could direct funding and ensure accountability from all sectors impacting water.

• Greater consumer protection – this includes upgrading the consumer body Consumer Council for Water, into an Ombudsman for Water to give stronger protection to customers and a clearer route to resolving complaints. Advocacy duties are to be transferred to Citizens Advice.

• Stronger environmental regulation, including compulsory water meters. Also proposed by Sir Jon are changes to wholesale tariffs for industrial users and greater water reuse and rainwater harvesting schemes. A new long-term, legally binding target for the water environment was suggested.

• Oversight of companies via the ability to block changes in ownership of water businesses when they are not seen to be prioritising the long-term interests of the company and its customers, and the addition of “public benefit” clauses in water company licences.

To boost company financial resilience, as the UK’s biggest provider, Thames Water struggles to remain in private ownership, the commission has recommended minimum financial requirements, like banks are subject to. This could mean utilities hold a certain amount of cash. It’s hoped this will, in turn, make companies more appealing to potential investors.

• The public health element of water has been recognised, and senior public health representation has been recommended for regional water planning authorities, as have new laws to address pollutants like forever chemicals and microplastics.

• Fundamental reset of economic regulation – including changes to ensure companies are investing in and maintaining assets to help attract long-term, low-risk investment. A “supervisory” approach has been recommended to intervene before things like pollution occur, rather than penalising the businesses after the event.

• Clear strategic direction – a long-term, 25-year national water strategy should be published by the UK and Welsh governments, with ministerial priorities given to water firms every five years.

• Infrastructure and asset health reforms – companies should also be required to map and assess their assets and resilience.

Nationalisation of the water industry was not in the Independent Water Commission’s terms of reference and so was not considered.

How has the report been received?

In a speech responding to Sir Jon’s report, Mr Reed is set to describe the water industry as “broken” and welcome the commission’s recommendations to ensure “the failures of the past can never happen again”.

The water industry lobby group Water UK said “fundamental change has been long overdue”.

“These recommendations should establish the foundations to secure our water supplies, support economic growth and end sewage entering our rivers and seas,” a spokesperson said.

“The Independent Water Commission has written a comprehensive, detailed review of the whole sector, with many wide-ranging and ambitious recommendations.

“Crucially, it is now up to government to decide which recommendations it will adopt, and in what way, but the commission’s work marks a significant step forward.”

Campaign group Surfers Against Sewage said the report “utterly fails to prioritise public benefit over private profit”.

“This is not transformational reform, this is putting lipstick on a pig - and you can bet the champagne is flowing in water company boardrooms across the land,” said its chief executive, Giles Bristow.

“Only one path forward remains: a full, systemic transformation that ends the ruthless pursuit of profit and puts the public good at the heart of our water services,” he said.

“We welcome Sir Jon’s calls for a national strategy, enshrining public health objectives in law and regional water planning. But we won’t be taken for fools - abolishing Ofwat and replacing it with a shinier regulator won’t stop sewage dumping or profiteering if the finance and ownership structures stay the same.”

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Starmer failed to take decisive step to smash the gangs at leaders summit – as small boat crossings exceed 2024

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Starmer failed to take decisive step to smash the gangs at leaders summit - as small boat crossings exceed 2024

There were some wins for the UK at the Western Balkans Summit at Lancaster House in central London today.

The UK unveiled a fresh list of sanctions – and believes it has made some headway convincing the EU to follow suit by placing restrictions on the likes of Kosovo passport forgers.

British participants also claimed to be pleased that Serbia and Montenegro were added to a joint migration taskforce and said UK and EU law enforcement would work even more closely.

But was it a moment where Sir Keir Starmer could convincingly claim to have taken a decisive step towards smashing the gangs, which was one of the goals he claimed he had for the summit this afternoon? Absolutely not.

While presented domestically as a means to tackle illegal immigration, in fact, the Western Balkans Summit was not primarily about migration, and I understood the talks focused on many other areas, including growth opportunities and EU enlargement.

Indeed, I was told that return hubs were not even on the prime minister’s agenda.

The leaders posed for a 'family photo'. Pic: PA
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The leaders posed for a ‘family photo’. Pic: PA

Perhaps unsurprisingly, western Balkan leaders did not want to talk about that and the summit was not designed in the first place to focus on that agenda, regardless of how it was presented to the domestic media.

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The backdrop for the summit couldn’t have been more tricky. The number of immigrants who crossed the Channel exceeded the number in 2024 on Wednesday.

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Man deported under ‘one in, one out’ returns to UK

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Meanwhile, the first of the 46 migrants returned to France made their way back over the Channel, claiming France is an unsafe country.

There was finger pointing from British officials about why the French police had not done more to detain and deter this man from returning.

And the truth is, migrants who leave the UK are returning – because in many cases we are giving them the cash to do so.

That aside, there is also a nervousness that the French one-in, one-out deal may collapse entirely in a matter of weeks.

Only 42 individuals have been removed from the UK to date but the EU has to authorise this plan for the long-term and it is far from clear that it will survive.

To have secured the long term future of that deal at an international summit would be a big success. Today’s were on a much smaller scale.

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PM backs call for MP investigation into Prince Andrew’s housing arrangement

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PM backs call for MP investigation into Prince Andrew's housing arrangement

Sir Keir Starmer has backed a call for a Commons investigation into Prince Andrew’s housing arrangement.

The King’s brother is still living in the Royal Lodge, a 30-room Windsor mansion owned by the Crown Estate, despite relinquishing his Duke of York title last week.

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It has emerged he only pays a “peppercorn rent” on the property – a legal term used in leases to show that rent technically exists, so the lease is valid, but it’s nominal – often £1 a year or even nothing at all.

Liberal Democrat leader Sir Ed Davey has called for a select committee inquiry into the Crown Estate, in which Prince Andrew would be called to give evidence.

Speaking in Prime Minister’s Questions, Sir Ed said: “Given the revelations about Royal Lodge, does the prime minister agree that this House needs to properly scrutinise the Crown Estate to ensure taxpayers’ interests are protected.

“The chancellor herself has said that the current arrangements are wrong.

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“So will the prime minister support a select committee inquiry, so all those involved can be called for evidence, including the current occupant?”

Responding, Prime Minister Sir Keir Starmer said: “It’s important in relation to all Crown properties that there is proper scrutiny, and I certainly support that.”

A document from the Crown Estate, which oversees the Royal Family’s land and property holdings, shows Andrew signed a 75-year lease on the Royal Lodge in 2003.

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Prince Andrew faces renewed scrutiny over his royal title and taxpayer-funded residence at Royal Lodge.

It reveals he paid £1m for the lease and that since then he has paid “one peppercorn” of rent “if demanded” per year.

Andrew was also required to pay a further £7.5m for refurbishments completed in 2005, according to a report by the National Audit Office.

The agreement also contains a clause that states the Crown Estate would have to pay Andrew around £558,000 if he gave up the lease.

The royal is under pressure to do just that amid continued scrutiny over his relationship with paedophile financier Jeffrey Epstein.

There has also been fresh focus on his sex accuser Virginia Giuffre’s allegations, which Andrew denies, after the publication of her posthumous memoirs.

Senior Tory Robert Jenrick said it was “about time Prince Andrew took himself off to live in private” as “the public are sick of him”.

Asked about his living arrangement on Tuesday, Chancellor Rachel Reeves told the BBC: “I do think people should pay their way and pay their fair share.”

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‘Man deported under ‘one in, one out’ scheme returns to UK in small boat

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'Man deported under 'one in, one out' scheme returns to UK in small boat

A migrant who was deported back to France under the government’s flagship “one in, one out” scheme has returned to the UK on a small boat.

The Iranian national was initially detained when he entered the UK on a small boat on 6 August. He was removed under the government’s deal with France on 19 September, and he returned on 18 October.

He has been detained once again, and Sky News understands that the government is set to expedite his removal back to France.

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The news comes as Sky News learns that more migrants have crossed the Channel on a small boat in 2025 so far than the entirety of 2024.

The “one in, one out” treaty with France allows the UK to return anyone who arrives in the UK on a small boat back to France, in exchange for France sending to the UK the same number of people who have never previously tried to enter illegally.

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The man told The Guardian newspaper that he had been a victim of modern slavery at the hands of people smugglers in northern France.

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“If I had felt that France was safe for me I would never have returned to the UK,” he claimed.

“When we were returned to France we were taken to a shelter in Paris. I didn’t dare to go out because I was afraid for my life. The smugglers are very dangerous. They always carry weapons and knives. I fell into the trap of a human trafficking network in the forests of France before I crossed to the UK from France the first time.

“They took me like a worthless object, forced me to work, abused me, and threatened me with a gun and told me I would be killed if I made the slightest protest. Every day and every night, I was filled with terror and stress. Every day I live in fear and anxiety, every loud noise, every shadow, every strange face scares me.

“When I reached UK the first time and Home Office asked what had happened to me I was crying and couldn’t speak about this because of shame.”

The UK government’s position is that France is a safe country.

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PM and Macron agree migrant deal

‘Rwanda is further than France’

The aim of the agreement with France is to create a disincentive for migrants to make the dangerous crossing across the Channel. But Downing Street repeatedly refused to describe the scheme as a “deterrent” this afternoon, insisting that the scheme is among a number of measures the government is taking to stop small boat crossings.

A Home Office spokesperson said in a statement: “We will not accept any abuse of our borders, and we will do everything in our power to remove those without the legal right to be here.

“Individuals who are returned under the pilot and subsequently attempt to re-enter the UK illegally will be removed.”

Former Tory home secretary James Cleverly quipped on social media that “Rwanda is a lot further away than France”, arguing that had their embattled scheme got off the ground, it would have been harder for migrants to make the return journey.

The prime minister is hosting Western Balkans leaders on Wednesday as the government tries to crack down on people smuggling and illegal migration.

But despite various government efforts, Sky News understands that more migrants have crossed the English Channel in small boats so far this year than in the whole of 2024, Sky News understands

While the exact number of people who have made the crossing today is not set to be published until tomorrow, Home Office sources have confirmed that more than 36,816 people – the total for 2024 – have now crossed the Channel so far in 2025.

Home Secretary Shabana Mahmood said in a statement: “The previous government left our borders in crisis, and we are still living with the consequences. These figures are shameful – the British people deserve better.

“This government is taking action. We have detained and removed more than 35,000 who were here illegally. Our historic deal with the French means those who arrive on small boats are now being sent back.

“But it is clear we must go further and faster – removing more of those here illegally, and stopping migrants from making small boat crossings in the first place.

“And I have been clear: I will do whatever it takes to restore order to our border.”

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