A new vision for water: UK white paper

This White Paper sets out our action plan for water. We will reform our water sector and the wider water system to make sure it delivers our most critical outcomes – safe and secure supplies of water, a protected and enhanced environment, a fair deal for customers and investors – in a way that is more efficient and integrated. For too long changes to the water system have been piecemeal or disjointed, pulling regulators and companies in different directions – not delivering better outcomes, but adding to regulatory complexity and burden.

We have already secured a down payment for this transformative change through the £104 billion investment programme the water sector will be delivering between 2025 and 2030 – representing a new approach from the underinvestment of the past. The water industry will need more investment into the future, so we now need to go further and take forward a suite of reforms covering the entire water system – from our underlying legislation right through to delivery on the ground – to tackle the wider long-standing problems the sector has faced and firmly secure our place on this new course. This is a path where our water sector reliably delivers for everyone and drives economic growth in every corner of England. Where there are clean rivers and seas we can all enjoy, resilient infrastructure that is fit for the future, and water companies and investors that act responsibly and deliver for customers. In this White Paper, we split the reforms we will undertake into the following key themes:

A New Direction for Water: Reforms to set clearer long-term direction – including reforms to Strategic Policy Statements, rationalising plans, better joined-up regional water planning function, and a long-term stability objective. To help stakeholders to manage these changes, we will publish a Transition Plan detailing the journey to a new system. These reforms will provide clear direction to help companies and investors better plan for the long term and take advantage of long-term efficiencies.

Resetting Regulation: Establishing a new integrated water regulator to provide greater stability, transparency, and an integrated view of both economic and environmental performance. A new supervisory approach will shift regulation towards being more proactive and targeted to the specific needs of each water company to improve performance – while also increasing grip over water company delivery. These reforms will establish a model for the new regulator to intervene early to help underperforming water companies recover faster, attract the investment they need, and improve long-term financial resilience, asset health, and environmental performance.

Attracting Investment: Making water a more attractive and reliable sector for investors seeking stable and fair returns. This will include rationalising and simplifying performance commitments to reduce the volatility in returns, and introducing new measures to improve financial resilience. We are also increasing competition through more innovative third-party financing, and reforming the appeals process to bring water in line with other utility sectors. These reforms will reset the balance of risk and return for investors, ensuring that they receive a fair bet – a return which adequately reflects the risk they take, helping to re-establish the water sector as a place for steady and stable returns.

Putting Customers First: Creation of a new independent water ombudsman. We are also acting to better protect customers by further safeguarding our world-class drinking water and increasing consideration of public health across the system. These reforms will ensure customer protection continues to be prioritised and enhanced.

Clear Action for Clean Water: Building on record investment in storm overflows and wastewater treatment, taking action to tackle sewer misuse and introducing a single set of stronger and clearer standards and enforcement for agricultural pollution. We are also moving to a system of open monitoring – where companies are not marking their own homework on environmental performance. These reforms will drive forward the government’s promise to clean up our rivers, lakes, and seas.

Water Security: Improving asset health through new mapping and statutory resilience standards, while cutting leakage and increasing water efficiency with more water reuse, smart metering, and innovative regulation. We are also streamlining infrastructure delivery with new planning systems, support for stronger supply chains and better regulatory oversight to protect infrastructure from growing risks. These reforms will help water companies get spades in the ground faster to build and maintain more resilient infrastructure.

Transition Plan: Committing to publish a Transition Plan this year to lead the water sector through transformative reforms. This transition will be guided by the following principles: delivering a clear and straightforward roadmap, providing clarity on roles and responsibilities, securing buy-in from regulators and the water industry, and setting out practical guidance on how to create capacity and providing robust governance processes. The transition will be led by government, working in partnership with existing regulators, companies, investors, and environmental organisations.

By addressing the structural challenges faced by the water system with these complementary and integrated reforms, this will allow us to tackle many of the long-standing opportunities and trade-offs head-on. These reforms will be mutually reinforcing, helping deliver multiple outcomes and all moving in the same direction towards a better system for customers, companies, regulators, investors, and the environment.