Why is UK water regulation set to be overhauled and what does it mean for UK businesses?

A nine month analysis of the water sector culminated in a wide-ranging 465-page report from the Independent Water Commission, which was released on 21st July 2025. Chaired by Sir Jon Cunliffe, the report lays out 88 recommendations that form a roadmap for transforming the water industry with the aim of rebuilding trust and creating a fairer service for customers.

The report was initially commissioned in response to growing concerns surrounding sewage spills.

Responsibility for regulating the water industry in England is currently divided between four different organisations: Ofwat, the Environment Agency, Natural England and the Drinking Water Inspectorate. Under new plans, this will be consolidated into one single water regulator for England and separation of all water regulation for Wales to another single regulator.

As the report states, “The current regulatory landscape is fragmented and overlapping and fully joined-up regulation is essential for the system to meet the demands of the future.”

According to the findings of the Water Commission, the pressure to keep bills low for much of the last two decades has resulted in a chronic underinvestment that has seen water infrastructure fall short of the standards expected.

In order to improve the water network, an estimated £104 billion investment is now required over the next five years to update an ageing infrastructure coming under increasing pressure due to climate change, population growth and economic development. As a result, it is estimated that water bills will rise significantly over the coming years.

As Sir Jon Cunliffe stated to the BBC, “The problem comes when you suddenly go from not investing for a long period, to massive investment in order to catch up.”

What this means for businesses and our role at Everflow

At Everflow we are responsible for representing business customers and buying the water supply services from wholesalers to meet the needs of the organisations we serve. In our role as an independent retailer, we welcome any water industry reforms that enable us to deliver improved service and reduced costs for our customers.

As the Cunliffe report has stated, investment in the water network will be essential in updating infrastructure and raising standards over the coming years – both in terms of customer service and sustainability.

Although this will undoubtedly be reflected in increased wholesale water costs, we will continue to work hard to ensure that businesses get the best deals on their water contracts and take advantage of any opportunity to reduce consumption. Through technological innovation and solutions such as our EcoMOT service we are working with customers to save both water and money. We are on a mission to help customers and the environment through better water management. In the last year alone, we saved SMEs:

• 25 megalitres in water consumption
• 646KwH in associated energy consumption
• 132 tonnes of carbon emissions

As the water sector evolves, we promise to be a voice for businesses and advocate for our customers, continuing to place an emphasis on innovation and environmental responsibility in everything we do. And we echo the words of Sir John Cunliffe in his report:

“Restoring trust has been central to our work. Trust that bills are fair, that regulation is effective, that water companies will act in the public interest and that investors can get a fair return . . . Resetting this sector and restoring pride in the future of our waterways matters to us all.”