Environment secretary: water failures are failures of regulation and governance

“The failures are failures of regulation and governance,” environment secretary Steve Reed told the Environment, Food and Rural Affairs (EFRA) Committee last week, referring to the water sector and the brief of the Cunliffe Commission, which is conducting an independent review for Government.

Reed said private ownership was not an issue, “because there are nationalised water companies that have similar problems with pollution to privately owned water companies” – rather that regulation and governance need to be reset to bring in investment and deliver more for customers and the environment. “There are plenty of investors out there who want to invest in a well-regulated and successful water sector,” he assured. 

Reed hinted that the PR24 investment package would be “upward of £88bn” (the draft determination number) “to start investing in our broken water infrastructure”.

He continued: “Water infrastructure in this country is in an appalling state, and that is why we have record levels of sewage. It is also why you have the problems in Cornwall, where last year, you had both the hosepipe ban and flooding at the same time, because the infrastructure cannot capture the water and then get it to where it needs to be. It is constraining growth in areas around Cambridgeshire – house development cannot go ahead because the clean water infrastructure is not there. In Oxfordshire, the absence of sewerage is constraining growth. We want growth. Growth is the top priority for this Government; it is how we get the money to fund our public services to give this country the wage rise that it needs. Water infrastructure is critical to all of that.”

Finally, Reed praised the Thames Tideway model as “a really good, interesting example of how a collaborative approach to developing water infrastructure can happen with a slightly different ownership and governance structure. It is a huge project delivered on budget and on time, and there are a lot of lessons in that for what we can do for other major water infrastructure up and down the country. I am drilling into that in my role.”

The evidence was part of the EFRA Committee inquiry into ‘The work of the department and its arm’s-length bodies’. Ofwat will give evidence tomorrow (26 November).

• The Environmental Audit Committee has launched an inquiry into ‘Environmental sustainability and housing growth’. This will consider whether government-proposed changes to the National Planning Policy Framework are compatible with climate and nature goals. The call for evidence is open until 20 December.