King’s Speech: water ‘special measures’ and green growth

Among the bumper package of legislation introduced in the King’s Speech last week was a Water (Special Measures) Bill, to bolster Ofwat’s powers over water company corporate behaviour and accountability.

Detail on precise measures remains scant, but the Bill will give Ofwat new powers to ban the payment of bonuses if environmental standards are not met, and increase the accountability of water executives – the latter expected to include personal criminal liability for company bosses for water quality breaches.

Some reports have also cited the introduction of automatic substantial fines for pollution. There was no mention of further dividend controls though, or of nationalisation – unlike in transport and energy, where the creation of publicly owned Great British Railways and Great British Energy featured prominently in the King’s Speech.

Ofwat’s chief executive, David Black, welcomed the gift of new powers. He said: “We look forward to working with the Government as it aims to increase our powers to drive more responsible decision-making in the board rooms of water companies, and support us in going further to protect and promote the interests of customers and the environment.”

The legislation will fulfil Labour’s manifesto promise to put failing firms into ‘special measures’ and follows other new actions announced the previous week by environment secretary Steve Reed. These were to ring fence water company infrastructure spending; introduce new customer panels to scrutinise water executives; boost customer compensation when failures occur; and change company Articles of Association to elevate customers and the environment in corporate objectives.

A number of other Bills set out in the King’s Speech will affect the water sector. Housing growth, underpinned by a new Planning and Infrastructure Bill to streamline planning and see 1.5m new homes built over the next five years, will come with water supply and wastewater discharge pressures, though will also support water and wastewater infrastructure development.

Green groups have emphasised the need for low carbon, water efficient and nature considerate approaches as growth is pursued. In a letter to nature conservation organisations, deputy prime minister Angela Rayner and environment secretary Steve Reed answered this call. They assured: “Nature recovery remains a top priority alongside the need to overhaul the planning system, grow the economy, and reach net zero. This is not a matter of choosing one of these priorities over another. Sustained economic growth depends upon a healthy natural environment.”

Calling for partnership working with green groups, Rayner and Reed continued: “We are determined to transform the system to ensure a win-win for housebuilding and nature. We want to use the value gained from enabling development to proceed quickly and smoothly to support nature recovery – and to do so in a way that gives everyone involved greater certainty. And we will only legislate if we are confident that it achieves these outcomes.”

Less prominent is the English Devolution Bill, which will extend devolution across England giving extra powers to mayors and local authorities. This could provide the opportunity for greater council and community involvement in water management decisions.