Budget touches on water reform and the role of Government in growth investment

(by Verity Mitchell)

Chancellor Rachel Reeves, in her Budget speech, took credit for the current Government’s achievement in “resolving the historic under-investment in water infrastructure across England and Wales which has led to bill increases over the past 12 months”.

Admitting that that under-investment has been the problem, rather than poor operational and financial management, reflects the Government’s recognition that there needs now to be a more supportive rhetoric about the water industry. Reeves confirmed that the Government will publish its White Paper on water reform later this year, following Sir Jon Cunliffe’s independent review. Her speech emphasised that proposed regulatory reforms “will deliver better value for money and keep long-term costs down for customers”.

She also commented on the need for customer support. “The Government and Ofwat are also requiring water companies to improve support for customers, including doubling compensation when minimum standards are not met, and reforming the WaterSure scheme to better support low-income households with high water needs.” This customer focus might prefigure the adoption, in the upcoming White Paper, of Cunliffe’s recommendation that a national social tariff is needed.

The chancellor also referred to the role of the National Wealth Fund (NWF) in “catalysing over £70bn of private investment in high-growth sectors”. Given that NWF has already supported HARP (United Utilities' Haweswater Aqueduct Resilience Programme) and is involved in advising the Havant Thicket consortium, it seems likely that it may invest in future major water projects currently under development.