The Environment, Food and Rural Affairs (EFRA) Committee is today
(Thursday 19 December) launching a new inquiry, Reforming the
Water Sector, to scrutinise the breadth of issues
confronting the water sector.
The inquiry comes at a time when water companies are facing
strong criticism for their environmental, financial and customer
satisfaction performance, and a backlash for paying out large
dividends to shareholders and bonuses to company
executives.
The water sector faces important concerns such as weak resilience
of water supply systems and future water security, while the UK's
water supplies are affected by a number of threats including
agricultural and sewage pollution.
MPs will run this piece of work as a long-term inquiry which will
see them take evidence in the coming months on a range of issues
including the financial stability of the water sector, support
for vulnerable consumers, water security, sewage overflows and
agricultural pollution, and emergency responses to flooding,
outages and drought.
The Committee will hold the first evidence session of this
inquiry in January, where it will consider the impact of Ofwat's
final determination on how much water bills will be permitted to
rise over the next five years. It will then take evidence from
some of the worst performing water companies to determine what
has gone wrong in the sector and how the Government can make
improvements.
This new inquiry will examine the Government's work taking place
in this area, including the progress of the Water (Special
Measures) Bill, and the work of the Government's Independent
Commission into the water sector, which is expected to report in
mid-2025.
The Chair of the EFRA Committee, MP,
said:
“Over the past few years we have seen a strong backlash to
water companies' failings. Companies have breached environmental
rules over sewage discharges while paying out huge dividends to
shareholders, and big bonuses to executives, even as they have
taken on ever more debt.
“In this inquiry our Committee will investigate the
deep-rooted problems underlying the industry. The experience of
sewage discharged into our rivers and seas, supply outages and
outbreaks of contamination in domestic water supplies have all
fed a deep dissatisfaction with the current performance of water
companies.
“Our inquiry will delve into the complex structuring of water
companies' finances, examine the challenges of upgrading the
sector's aged infrastructure, and investigate the real impact
people are feeling from increases to their water
bills.
“We need a water system that is fit for the future. The
Government and the regulator Ofwat urgently need to
restore public confidence in the sector.”
