The House of Lords Industry and Regulators Committee has criticised the Government’s “lack of leadership and deep-rooted complacency” in the conclusion to its follow-up inquiry into Ofwat, the water industry and the role of Government.

In a letter to Thérèse Coffey MP, Secretary of State for Environment, Food and Rural Affairs, the cross-party committee has set out a number of conclusions and recommendations on a range of issues including: investment and bills; financial resilience; wet wipes; future water supply; and regulatory powers and resources.

While the committee acknowledges changes in water policy and regulation since its March 2023 report: ‘The affluent and the effluent: cleaning up the failures of water regulation’, it criticises the “dismissive brevity and complacent tone” of the Government’s response to the report.

In its letter, the Committee:

• warns that continued under-investment in water infrastructure will have serious long-term consequences for the environment and the security of water supplies, risking the possibility of future water shortages;
• expresses doubt that the sector will be able to attract the investment it needs, despite the publication of the National Water Strategy;
• warns that water bills are likely to increase, and expresses disappointment that the Government has not introduced a single social tariff to ensure consistent support for those struggling to pay their bills;
• expresses dismay with delays in banning wet wipes containing plastics, delays which are unnecessary and deeply damaging to the environment;
• concludes that Ofwat and the Environment Agency’s lack of confidence is holding back nature- and catchment-based approaches, in particular in relation to reducing storm overflow discharges;
• concludes that proposals for reducing water demand are insufficient to meet Government targets.

It calls on the Government to:

• set out what action it intends to take to increase investment in the water sector;
• give clear guidance to Ofwat on the balance between investment and the affordability of customer bills ahead of the next Price Review;
• announce its proposals on social tariffs as soon as possible;
• provide long-term, outcomes-based targets for the key areas of investment needed in the sector, particularly in relation to infrastructure investment;
• introduce compulsory water metering;
• set out whether it intends to introduce sustainable drainage requirements in advance of any relaxation of nutrient neutrality rules.