A refreshed regulator? Government announce plans to carry out ‘once in a generation’ overhaul of water system

The government has announced a major overhaul of the water system in order to protect households from disruption. The Water White Paper is set to offer powers to new regulator that will ensure water companies are held to greater accountability.

This comes amid significant disruption for residents in Kent and Sussex recently, which left thousands with supply issues and trouble accessing water to their homes.

New policies outlined include the introduction of a Chief Engineer to bring technical expertise to a new single water regulator. This follows the government announcement from July 2025 that the current water regulator, OFWAT, would be abolished and replaced by a new single regulator that would be given more powers to ensure water companies meet necessary standards. The Chief Engineer will be expected to provide greater accountability over water companies performance, as the new regulator will carry out ‘MOT’ style checks on water company infrastructure that will prompt the testing of pipes and pumps as a means to identify issues before they result in further water shortages.

READ MORE: ‘Thames Water creditors’ sewage deal will not wash with customers’ 

The government say this demonstrates a move to a ‘prevention first’ approach, that will mean water firms and company bosses have to plan for the long-term. The new regulator will have a ‘dedicated supervisory team’, designated to each different water company, with the aim of providing the regulator with a deep understanding of the internal workings of each company. This is so that, should the regulator determine it needs to intervene in a specific company, it will be well equipped to do so.

If water companies are identified as falling short of standards set by the regulator, then a new Performance Improvement Regime will give the regulator powers to intervene and resolve issues in a manner that allows struggling water companies to recover quickly. Equally, further investigatory powers will be provided to the new regulator, allowing for ‘no notice’ inspections.

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Environment Secretary Emma Reynolds described the overhaul as a set of ‘once in a generation reforms’ to the UK water system, stating: “Water companies will have nowhere to hide from poor performance, customers will get the service they deserve, and investors will see a system built for the future.” She added that these reforms expand on “the tough action we’ve already delivered, from record investment to banning unfair bonuses.” This comes following government prevention of £4 million in bonuses last summer, while company bosses can now face criminal liability for covering illegal sewage spills.

The government also estimates that £125 million of savings will be made through the roll-out of smart meters and mandatory efficiency labels on household appliances like dishwashers and washing machines to help households monitor use and cut costs.

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The government will also set out plans to make further reforms to the system, as they seek to bring stakeholders and decision makers that work across the water industry together into a more joined up approach across local area specific plans. A 2026 Transition Plan alongside a water reform bill are due to come forward, as the government looks to introduce the necessary legislation to carry out the reforms to the system it has outlined.

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