Response ID ANON-XXU5-KQX5-3 Submitted to Independent Water Commission – Call for Evidence Submitted on 2025-04-20 15:10:33
About you
1 Would you like your response to be confidential?
3 Do you consent to being contacted by the Independent Water Commission about your response?
Yes
4 If you consented above, please provide your… email address. Email: wansteadclimateaction@gmail.com
6 In what capacity are you completing this Call for Evidence?
As an NGO or other non-profit public interest group
7 What is the name of the organisation or interested group that you are responding on behalf of? Organisation:
Wanstead Climate Action
8 Where do you live?
England
9 Where does your business or organisation operate? England
10 Thinking ahead to what you would like the English water system to look like in the future (e.g., in 25 years time), what outcomes from the water system are most important to you? (Please select your first priority here): Other
If you selected other, please specify below:
Public ownership of the water industry. Removing the greed and profit motive from stewardship of our water is the optimum way to ensure that all the other priorities are met Water System Outcomes:
Second Priority 10b Thinking ahead to what you would like the water system to look like in the future (e.g., in 25 years time), what outcomes from the water system are most important to you? (Please select your second priority here):
Improved water environment (e.g. healthy habitats for aquatic plants and animals) If you selected other, please specify below. Where possible, please describe the extent to which this already being done.:
Second Priority: Improved Water Environment
11k To what extent do you believe the overall water framework already delivers your chosen outcome: an improved water environment (e.g. healthy habitats for aquatic plants and animals)? Very little
Water System Outcomes: Third Priority 10c Thinking ahead to what you would like the water system to look like in the future (e.g., in 25 years time), what outcomes from the water system are most important to you? (Please select your third priority here) A water system which contributes to net zero
11y To what extent do you believe the overall water framework already delivers your chosen outcome: a water system which contributes to net zero?
Very little
12 Who do you believe should be responsible for making decisions about what outcomes to prioritise from the water system? This is not intended to be an exhaustive list. Apart from the above, please think about other bodies you consider to be relevant. :
Our group believes that there should be strong leadership from Government in partnership with democratic structures at a local level with power to make decisions locally based on local understanding and interests. These local democratic structures should include environmental groups, mayors and other local authority representatives, public health experts and bill payers. There are plenty of good models available. Just one example is Sweden where the local waste water systems are owned locally and involve a good degree of local involvement.
13 Do you believe there should be changes to roles and responsibilities for water management across local, regional and national levels? Changes are needed If you selected changes are needed, please explain below. Consider how you believe roles and responsibilities should be better organised across local, regional, and national levels, including who you believe should be the lead authority at each level and why. :
Our group would strongly support the idea of creating Regional Water Authorities to address the current fragmented system. One example of such a model is Paris where water is run with representation from environmental groups and other stakeholders. Such Authorities would provide democratic control and accountability over decision making using local knowledge and experts. The current arrangements have resulted in delays and lack of clarity over responsibility for dealing with pollution and leaks, ineffective use of public money and a lack of planning when it comes to the challenges of climate change.
14 Do you believe changes are needed to help reduce the siloed approach to water management across different sectors? If so, what changes do you believe would be beneficial? (Please select up to 5 options) A regional or catchment scale systems planning authority, Streamlining or aligning existing water plans and planning processes across the water system, Aligning water management with democratic structures, Pooling together existing funding streams at a spatial level, Changes to how regulators regulate sectors involved in the water system (e.g. through monitoring, advice, enforcement, etc.) If you selected other, please specify below:
15 Do you believe there are barriers to money being spent more effectively and efficiently across different sectors to deliver the best outcomes for the water system? If so, what do you believe are the key barriers? (Please select up to 3 options) Unclear targets and objectives, Limitations of alignment of existing funding pots (e.g. water company investment, agri-environment schemes, government funding for Catchment Partnerships), The scale at which actions are developed (e.g. actions are developed at too large or too small a scale, lack of spatially targeted actions) If you selected other, please specify below:
16 In your opinion, is it more important that regional water system governance aligns with hydrological or local government boundaries?Hydrological boundaries (e.g. water catchments, river basin districts)
Management of the Water Environment
17 Do you believe changes are needed to the WFD Regulations, including for 2027 onwards? If so, which areas would benefit the most from change? (Please select all that apply) The targets and objectives (e.g. ‘Good Ecological Status’ water body objectives, the designation of Artificial and Heavily Modified Water Bodies, the deadlines for achieving environmental objectives, the scale at which objectives are set and applied), River Basin Management Plans (e.g. spatial coverage, scope, the length of the planning cycle, the programmes of measures), The classification system (e.g. chemicals, ecological, groundwaters), The monitoring system (e.g. the evidence base, the use of technology, data sharing for monitoring, reporting), Governance and accountability (e.g. the duties of governments and organisations), Public participation and engagement (e.g. through consultations, delivery and investment planning)
18 If you feel the WFD Regulations would benefit from change, please expand on where you feel changes are necessary and the reasons why. Please expand below:
Strengthen the polluter pays principle. Introduce tougher, clearer targets and give regulators stronger enforcement powers Implement independent monitoring with transparent publication of data. Remove the loophole that allows exemption from water quality targets based on economic considerations. Expand the system to take into account a wider range of pollutants, such as microplastics Measuring and Assessing the Water Environment
19 Do you believe changes are needed to improve how we monitor and report on the health of the water environment? If so, what changes do you believe could lead to improvements? (Please select all that apply) Reporting on wider outcomes than ecological status (e.g. public health), Use of citizen science, Data sharing platforms for government and third-party evidence/data, Expanding out from the water body level to report on a whole catchment, Full or partial integration with wider environmental/water monitoring If you selected other, please specify below:
Strategic Direction for the Water Industry
20 What role do you believe the government can play in providing strategic direction for the water industry? By ‘strategic direction’ we mean, for example: the Strategic Policy Statement / the Strategic Priorities and Objectives Statement; Government targets (e.g. in the Environment Act 2021 and the Plan for Water in England only); the Price Review Forum (Wales only). This is not an exhaustive list. Please answer below. :
The most effective way the Government could provide strategic direction to the water industry would be by taking it back into public ownership. The strategy would then be under full democratic control and scrutiny. It could focus entirely on the interests of the environment and public health etc. rather than on ensuring shareholders make a profit. The Government should in any event play a stronger role when it comes to long term planning to address issues such as climate change, resilience and depletion of nature. The Government should set legally binding environmental targets with a requirement to invest in securing recovery and maintenance of nature. The Government should set up and work in partnership with democratic and transparent Regional Water Authorities with decision making powers. This would ensure that decisions at a local level have input from local experts on eg the environment and water quality and community representatives, all of whom are in the best position to decide on local needs and priorities.
21 What changes, if any, should be made to how the government provides strategic direction for the water industry? Changes are needed If you selected that changes are needed, please describe what changes you feel are needed and why.:
One important reform our group supports is the creation of Regional Water Authorities which would help determine local strategy based on local knowledge and expertise. Strategic direction would also be improved and clarified through making investment in improving and sustaining the natural environment obligatory and enforcing stronger, legally binding environmental targets. There has been little long term strategic planning for climate change and the collapse of bio-diversity, and this should be front and centre of an enforceable long term plan
22 Do you believe there are barriers to effective long-term water industry planning? If so, what factors do you believe are preventing effective long-term water industry planning? (Please select all that apply) Limited clear guidance from UK and Welsh Governments on priorities and how to manage trade-offs, Limited timebound, specific and measurable targets (e.g. for water outcomes such as water quality and water supply, or wider outcomes such as net zero, nature-based solutions, circular economy), Regulators are not adequately supporting effective planning (e.g. through guidance, scrutiny), Plans don’t interact well together (e.g. duplication, decisions/timelines/asks conflict, and/or decisions aren’t sequenced in the right order across plans) If you selected other, please specify below:
23 What changes, if any, would help water companies to use planning frameworks more effectively to fulfil their duties and deliver their functions? Please answer and explain below:
The Regulators
24 How would you rate the performance of the water regulatory framework?
Performing very poorly
25 To what extent do water regulators coordinate effectively in the regulation of the water industry?
Very little
26 What changes, if any, do you consider are needed to the framework of water regulators to improve the regulation of the water industry? Please consider both potential benefits and costs of any proposed changes. Please answer and explain below, providing supporting examples or evidence, where possible:
One of the fundamental issues concerns how any effective system of licensing should work. There appears to be no example to date of a licence to a water company being revoked for breaches of environmental or financial obligations, no matter how serious the breaches. Consequently companies, which have demonstrated they are not ‘fit and proper’ persons to run an industry through their multiple breaches have been allowed to continue with their flawed stewardship. Unless and until revocation of licences for serious breaches is built into the system companies will no they can get away with flouting requirements. Penalties should be more substantial so that they truly ‘bite’ and act as an incentive to water companies to perform better and comply with their legal obligations. It is not clear why regulators have thus far failed to use confiscation proceedings to divest companies of assets where they have wilfully committed environmental crimes, as is the case for example where licensed property landlords breach regulations to protect tenants. This could be an effective way of taking shares from companies as a means to bring them back into public ownership.
27 To what extent do you think the water industry regulators have the capacity, capabilities and skills required to effectively perform their roles? Please provide information to support your views on the capacity and capability of regulators, including, where possible, supporting evidence and examples :
It is clear from the experience of our group, and members of our group locally, that the regulators are underfunded and understaffed. For example, an illegal discharge into our local river, the Roding, was identified in 2021. It was reported to the regulators at the time. So far as we are aware it has still not been acted upon. This particular scandal has been reported in the national press. The discovery and reporting of this discharge is itself powerful evidence of the important role that local environmentalists and citizen scientists can and should be able to play in monitoring the system and achieving improvements.
Economic Regulation
28 To what extent do you think the economic regulatory framework is delivering positive outcomes?
Very little
29 How do you think the Price Review process should balance the need to keep customer bills low with the need for infrastructure resilience? (Infrastructure resilience is the ability of an organisation’s infrastructure, and the skills to run that infrastructure, to avoid, cope with, and recover from disruption in its performance) Please answer and explain below, providing supporting examples or evidence, where possible:
Our group strongly believes that the most effective way of balancing customers’ bills with the need for infrastructure investment is to take water back into public ownership. Private water monopolies with always put their focus on maximising profits, which means that bill payers money will be diverted from much needed investment into the pockets of shareholders. One of the biggest causes of bill rises in our region is the level of debt taken on by Thames Water, which means that approx a third of our bills now goes on servicing this debt. This disgrace is underlined by the latest loan of £3billion rubberstamped by the High Court which is being borrowed at a rate of 9.75% It is important to note that even this level of borrowing does not guarantee that there will be anything like the investment in infrastructure that is needed. The nettle must be grasped before matters get any worse.
30 What, if any, changes could be made to the Price Review process to better enable the water industry to deliver positive outcomes? Please answer and explain below, providing supporting examples or evidence, where possible:
In our view there is no answer under the present system. The water companies will continue to insist on massive above inflation price rises for customers in order to make investment viable, and they will continue to cream off as much of customers bills as possible while avoiding the much needed investment.
31 What, if any, changes could be made to the Price Review process on assessing and setting base expenditure to effectively support infrastructure maintenance? Please answer and explain below, providing supporting examples or evidence, where possible:
Base expenditure should be based on what is actually needed. Water companies should be banned from prioritising dividends
32 What, if any, changes could be made to the Price Review process on assessing and setting enhancement expenditure to effectively support infrastructure improvements? Please answer and explain below, providing supporting examples or evidence, where possible.:
33 What, if any, changes could be made to the Price Review Process on assessing and setting the Weighted Average Cost of Capital (WACC) to effectively attract investment in the water industry? Please answer and explain below, providing supporting examples or evidence, where possible.:
34 What, if any, changes could be made to the Price Review process on assessing and setting performance incentives to effectively secure infrastructure delivery? This could be across Outcome Delivery Incentives (ODIs) to effectively deliver for customers, the environment and public health; and/or across Price Control Deliverables (PCDs), for example Please answer and explain below, providing supporting examples or evidence, where possible.:
Customer Bills
35 To what extent does the economic regulatory framework deliver acceptable water bills for customers?
Not at all
36 What, if any, changes would help ensure customers are paying fairly for the water they use? (Please select all that apply) Improve transparency for customers on how money from bills is used, Other (please specify) If you selected other, please specify below:
It is inherently unfair that customers are compelled to contribute towards servicing debt incurred through gross mismanagement and greed. The most effective change to secure fairness would be to take the water industry back into public ownership and democratic control.
Customer Protections
37 To what extent does the regulatory framework protect customers from poor service?
Very little
38 To what extent does the regulatory framework ensure that vulnerable customers are effectively supported?
Very little
39 What, if any, changes to the regulatory framework would better incentivise water companies to deliver and maintain high customer standards? (Please select all that apply)Ensure customer matters are investigated and, where necessary, enforcement action taken, Greater accountability for water companies’ handling of complaints, Other (please specify) If you selected other, please specify below:
An effective licensing system which revokes the licences of water companies who are in substantial breach of their obligations
40 What, if any, changes to the regulatory framework would improve support for customers in vulnerable circumstances? (Please select all that apply) Introduce a single social tariff for England and Wales, Ensure a proactive approach by water companies in identifying customers eligible for additional support If you selected other, please specify below:
Financial Resilience
41 To what extent is change required to the economic regulatory framework to support water companies’ financial resilience?
To a great extent
42 Which of the following changes to the economic regulatory framework, if any, would improve outcomes for the water industry? (Please select all that apply) Changes to the Price Review process to support financial resilience, Changes to the oversight of water company debt (for example, ‘capping’ company debt levels), Changes to financial oversight of companies (for example, moving to a more supervisory model as defined in the Call for Evidence), Changes to the Special Administration Regime (for example, providing guidance on the thresholds for the SAR) If you selected other, please specify below:
43 Do you think there is evidence on the historical relationship between debt, dividends, and expenditure at water companies that the commission should be looking at? Please answer and explain below, providing supporting examples and evidence, where possible.:
There is overwhelming evidence in our area of financial manipulation by Thames Water over decades to enrich shareholders and executives at the expense of the environment, investment in infrastructure and customers. It is important that the commission examines the evidence of how the problems experienced in the Thames area are experienced to a considerable extent in every single one of the privatised water regions of England. These problems include underinvestment, rampant pollution, excessive bills, massive debt. This is not a coincidence. These problems are inherent in a system where water is under the control of private monopolies whose sole rationale is maximising profit. The commission would benefit from looking around the world and comparing our system with the vast majority of countries where water is under public democratic control.
Investment
44 To what extent does the economic regulatory framework support or hinder investment into the sector?
Neither supports nor hinders investment
45 How do financial returns in the water sector compare to other similar sectors (for example, energy)? Please answer and explain below, providing supporting examples or evidence, where possible.:
Returns in the water sector have historically been far too high. There are many examples around the world where the water industry is run well under public control without the need for anyone to profit.
46 What options, if any, would incentivise investment in the water sector? Please answer and explain below, providing supporting examples or evidence, where possible.:
A public ownership model would be attractive to investors who put public good and the environment before profit.
47 How does the public and political portrayal of water companies in the media and elsewhere affect the attractiveness of the water sector to investors? Other (please specify)If you selected other, please specify below:
The negative portrayal of water companies is well-deserved. It should be used to encourage investment only from those committed in the long term to the environment and the public good.
Competition
48 To what extent should further competition in the water industry be encouraged through regulation? Please answer below and provide evidence and examples, where possible:
Our group sees no place for competition in what is a natural monopoly of one of an essential to life.
49 Which of the following schemes, if any, have failed to provide effective levels of competition and efficiency? (Please select all that apply)
50 Which of the following changes to competition schemes, if any, would improve outcomes for the sector? (Please select all that apply) If you selected other, please specify below:
51 To what extent would greater market tendering of infrastructure delivery projects improve outcomes? Please answer and explain below, providing evidence and examples, where possible:
Water Industry Public Policy Outcomes
52 Do you believe that legal and/or regulatory requirements would benefit from review or consolidation? Please answer and explain below, providing evidence and examples, where possible:
Protecting the Environment
53 Do you believe that the system of environmental regulation, monitoring and enforcement is ensuring water company compliance with environmental standards?
Very little
54 Which of the following changes to water industry environmental regulatory requirements, if any, would improve outcomes from the sector? (Please select all that apply) Legislative reforms to address current and emerging threats, Other (please specify) If you selected other, please specify below:
Enforce existing requirements. There is little point in strengthening requirements when the existing ones are flouted. Greater legal duties to prevent pollution. Introduce a ‘polluter pays’ principle.
55 Which of the following changes to the water industry environmental regulation, monitoring and enforcement framework, if any, would improve outcomes for the sector? (Please select all that apply) Enhanced monitoring, including reform of operator self-monitoring, Expanded use of inspections and audits, Swifter enforcement If you selected other, please specify below:
Delivering Clean Drinking Water
56 What changes, if any, could be made to the drinking water regulatory system to maintain world leading drinking water quality? (Please select all that apply) If you selected other, please specify below:
Securing Resilient Water Supply
57 To what extent is the overall water regulatory framework securing resilient long-term supplies of water?
Very little
58 What changes, if any, could be made to the overall water regulatory framework to ensure it can secure a resilient long-term supply of water? (Please select all that apply) Integrated water management framework to improve the management of the water system, Changes to regulatory responsibilities or introduction of new requirements or standards to oversee delivery, Abstraction reform, New water demand and efficiency policies, Other (please specify) If you selected other, or want to provide additional views, please specify below:
Climate change must be factored into planning, and in particular the need for more reservoirs. There must be a national strategy to reduce unsustainable abstraction.
Infrastructure and Supply Chain Resilience and Security
59 To what extent does the overall water regulatory framework support or hinder infrastructure resilience? When considering your answer, please think about future pressures including factors such as climate change and population growth.
Significantly hinders infrastructure resilience
60 To what extent does the overall water regulatory framework support or hinder infrastructure security? When considering your answers, please think about evolving security threats such as cyber security.
Significantly hinders infrastructure security 61 To what extent does the overall water regulatory framework support or hinder effective management of supply chain risks? When considering your answers, please think about disruption in and constraints from supply chains.
Significantly hinders effective management
62 What changes, if any, could be made to the overall water regulatory framework to better support infrastructure resilience? (Please select all that apply) Changes to the scope and enforcement of existing infrastructure requirements (for example, strengthening requirements on companies to map assets), Setting infrastructure resilience standards (for example, requiring companies to prepare for a defined level of disruption) If you selected other, please specify below:
63 What changes, if any, could be made to the overall water regulatory framework to better support infrastructure security? (Please select all that apply) Changes to existing legislation, such as Security Emergency Measures Direction and cyber security regulations (for example, giving powers in relation to security of wastewater infrastructure), Changes to the enforcement of security regulations (for example, providing the DWI with powers to issue directions under Security Emergency Measures Direction) If you selected other, please specify below:
64 What changes, if any, could be made to the overall water regulatory framework to better manage risks from supply chains? (Please select all that apply) If you selected other, please specify below:
Innovation and technology
65 To what extent does the overall water regulatory framework currently support or hinder innovation?
Somewhat hinders innovation
66 Which of the following changes in the sector, if any, would enable innovation outcomes? (Please select all that apply) Changes to the way companies and regulators approach risk (for example, introducing a regulatory ‘sandboxing’ tool), More outcome based regulation to allow flexibility on delivery approaches, Changes to the Price Review process to support innovation (for example, treating research and development spending separately in the Price Review) If you selected other, please specify below:
67 What opportunities, if any, do new technologies present for companies and the regulators? Please answer and explain below, providing evidence and examples, where possible. :
Live monitoring and transparent reporting of pollution, and using ‘citizen scientists.’ Water companies who genuinely value the interests of the public and the environment should welcome the opportunity to provide the tools for local stakeholders to do this work on the ground.Using nature based solutions to the benefit of the environment and addressing climate change. Eg enhancing reedbeds and wetlands
Ownership
68 What impact, if any, has consolidation of water companies had on their performance? Please answer and explain below:
The impact has been negative. Larger companies are more difficult to manage and lack local focus. They have gone hand in hand with higher rates of pollution and more complex finances.
69 What impact, if any, does whether or not a water company is listed on the stock exchange have on their performance? Please answer and explain below:
Listing companies has reinforced their focus on profit over the needs of the environment and customers.
70 What impact, if any, do complex company structures like Whole Business Securitisation have on water company performance? Please answer and explain below:
Thames Water is a prime example on the adverse impact of WBS’s on performance. Customers are now paying dearly for their failure and the massive debts incurred.
71 What impact, if any, does the type of investor (for example, private equity firms, pension funds) have on water company performance? Please answer and explain below:
It is not coincidental that the public and the environment have been badly served by private investors in every one of the English water regions. In each case decisions have been driven by profit over any other interest. There are many different models for not for profit ownership which would be vastly better, as demonstrated in different jurisdictions around the world. It is also not coincidental that the vast majority of jurisdictions have decided that water is too important not to be left in the hands of private monopolies.
Ownership (for Wales only) 72 How effective has Dŵr Cymru Welsh Water’s not-for-profit model been in driving improved outcomes? Please explain below: 73 What are the risks associated with Dŵr Cymru Welsh Water’s not-for-profit model? Please explain below:
[consultation response ends]
Wanstead Climate Action 