Water companies in the UK are regulated by Ofwat, the Water Services Regulation Authority, which oversees pricing and service standards. A new government overhaul aims to replace Ofwat with a superregulator to streamline oversight and improve accountability across the water industry.
What Does Ofwat Do?
It is the role of Ofwat to oversee the economic regulation of the water and sewerage industry in England and Wales.
Water and sewerage companies are responsible for maintaining public water mains and sewers, detecting and repairing leaks, and ensuring water quality and the safe disposal of wastewater. To regulate their operations, Ofwat:
- Sets price controls for water companies
- Protects consumers and the environment
- Ensures the long-term resilience of water supply and wastewater systems
If Ofwat finds that water companies are failing to fulfil their duties, it can impose financial penalties and enforcement orders.
Why is Ofwat Being Replaced by a Superregulator?
In July 2025, Environment Secretary Steve Reed announced a major overhaul of the water regulatory sector. This was following a review of Ofwat calling for a single integrated water regulator alongside growing public concern over increasing water bills, declining services and sewage pollution affecting coastal waters.
The new superregulator aims to:
- Cut sewage pollution in half within five years
- Prevent further abuses by water companies
- Ensure fair pricing and stronger environmental protections
- Restore public confidence
This new superregulator will combine functions of four separate regulators (Ofwat, Environment Agency, Natural England, and the Drinking Water Inspectorate) to create a more effective system for holding water companies accountable and ensuring they meet performance targets.
Why Now?
This change comes forward following the publication of Sir John Cunliffe’s Independent Water Commission final report. The Government’s full response to the report will be published in Autumn 2025, with a new White Paper and consultation. The Government is also proposing a new water reform bill early during this parliament.
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