Wales to wrap systems planning into regulation, and align water functions to the border

(by Karma Loveday)

Wales will take the opportunity presented by Independent Water Commission-led reform (IWC) to rethink its water arrangements beyond regulation.

In a statement to the Senedd, deputy first minister and cabinet secretary for climate change and rural affairs Huw Irranca-Davies shared the following intentions, in his update on next steps for Wales from the IWC: 

• To create a new economic water regulator for Wales in line with IWC recommendation, but one that also incorporates water system planning functions. Irranca-Davies said: “This approach would enable a more holistic and integrated system for managing water, one that balances our national priorities with local needs, encourages people to work together and supports investor confidence. We intend to consult on this proposal later this year to ensure that the regulatory framework we develop is fit for purpose and aligned with our ambitions for water reform.”

• To move towards “a more ethical, collaborative approach” in line with the Wellbeing of Future Generations Act. “This means embracing shared objectives, where the environmental costs and the impacts of sustainable water management are considered alongside the affordability water bills. We will embed sustainability, fairness, health, equality and resilience into the very fabric of our water system.” 

• The Welsh Government will set the national, long-term strategic direction for all aspects of water management, ranging from water supply to resilience to climate change. “We will provide clarity on ministerial priorities, ensuring accountability and cross-sectoral alignment. Now, these reforms will enable us to move from fragmented planning to system-level planning, balancing our national priorities with local needs and fostering collaboration across sectors, from agriculture and housing to industry and transport.”

• Secure new powers for the Senedd to enable it to legislate for the first time on economic regulation.

• Co-design a shared transition plan with Defra – “a road map that will set out the route to a new water system in Wales. This plan will be essential to maintaining public confidence and investor trust during the transition period.”

• Put in place transitional arrangements, including an interim strategic policy statement to Ofwat, and a steer to other regulators, providing clarity. “This statement will articulate our policy priorities during the transitional phase, and help ensure continuity and coherence.”

• Consult publicly on the vision for water reform in Wales. “And alongside economic regulation, that vision includes alignment of all water functions to the Welsh border; a greater focus on asset health and climate resilience; stronger environmental regulation and catchment-level solutions; continued support for independent customer advocacy; and exploration of a new ombudsman for water in Wales.”