UK government to intervene in Ofwat water price review for first time
Environment secretary Angela Eagle has told water companies and regulators in England and Wales the next Ofwat price review must prioritise value for money, leaks and sewage.
The story in focus
The Guardian reports that UK environment secretary Angela Eagle has written to water companies and regulators in England and Wales, announcing government intervention in the next Ofwat price review—the first in the five-year process—with the letter setting priorities of value for money, technology investment and early action on leaks and sewage.
- Angela Eagle has written to water company chief executives and regulators setting priorities for the next Ofwat price review.
- The Guardian reports there has never been government intervention in the five-year review process, which Ofwat runs.
- The letter asks for better value for money, but does not demand bill cuts.
- Priorities include investment in new technology, early action on leaks and sewage, and more power for local communities.
- The review is expected to conclude in 2029; Defra sources call the move the start of a longer transition for the sector.
What the letter sets out
The Guardian reports that Angela Eagle, the environment secretary, has written to water company chief executives and regulators in England and Wales about the next price review, which Ofwat conducts by analysing companies' business plans and setting the charges that fund investment and running costs.
The letter names affordable bills as the first priority, calling for a laser focus on value for money for customers, while stopping short of demanding bill cuts. It also asks for investment in new technology to save money, early intervention on leaks and sewage, and better communication, with more decision-making power handed to local communities and leaders. Eagle's letter describes the review as not business as usual and as the beginning of a long-term transition to a different model for the water sector.
Why the intervention matters
According to The Guardian, there has never been government intervention in the five-year review process. Sources at the Department for Environment, Food and Rural Affairs said Eagle's move is a down payment on larger changes expected in a 10-year plan to follow the budget, and that the government wants regulators and companies to act now on investment decisions. Sources close to Eagle said immediate action was needed because companies are already making decisions before the process concludes, which is expected in 2029.
The intervention comes as the government explores options for Thames Water, which is running out of cash, and follows the 2024 review, which authorised a £104bn modernisation programme funded largely through bill increases. Campaign group We Own It said the proposals fall short of reducing bills or environmental harm.
The wider context
The Guardian reported that the last price review led to controversial bill rises, with average water bills set to rise 36% over the second half of the decade. Several major suppliers requested permission over the summer to charge billions more to cover capital costs and debt obligations. Defra sources said Eagle's intervention is one of the clearest symbols of public frustration with Britain's infrastructure.
What does the government want from the next water price review?
The Guardian reports the letter sets priorities including affordable bills with better value for money, investment in new technology, early action on leaks and sewage, and greater decision-making power for local communities.
Sources & further reading
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