Adam Goldsmith
Live reporter

Image source, PA Media

A long-anticipated report has called for big changes to the water industry in England and Wales. Here are the day's key developments:

• Ofwat, the economic regulator for the water industry in England and Wales, will be scrapped, Environment Secretary Steve Reed announced
• Instead, a new single watchdog will "prevent the abuses of the past", Reed says - though our climate and science reporter notes many of the regulator's staff will likely stay the same
• Scrapping Ofwat was one of 88 recommendations made in a 465-page report by Sir Jon Cunliffe, released at 06:00 this morning
• But campaigners say the findings merely give the "illusion of change". The report was not asked to consider the case for nationalising the sector, and one group said the recommendations were like "putting lipstick on a pig"
• The report's author warns bills will likely rise to support investment in infrastructure - with Cunliffe suggesting a figure of 30% above inflation in the next five years. Our climate and science reporter has more on how that could work
• Water UK boss David Henderson says the report represents "exactly what's needed" amid public frustration at performance - and blames the regulator for a lack of infrastructure investment

Steve Reed is due to give more detail to MPs in the House of Commons later this afternoon, but for further reading before then check out:

• Five key takeaways from the landmark water review
• Simon Jack asks: Will the water industry proposals make any difference?

We're closing our live coverage there for now. Thanks for reading.

Esme Stallard
Climate and science reporter

Regarding the water regulation changes for customers who have been mistreated previously by water companies, will we be able to receive any compensation based on a new regulator looking at previous cases? R Dhillon

In July, the government updated the rules, external so that customers will receive increased compensation for disruption to supply.

But if a customer complains about a service to the Consumer Council of Water (CCW), its decision is not legally binding on companies.

Sir Jon recommended that a new ombudsman that did have this power would "improve consumer trust" - which the government in anticipation announced on Sunday night.

Its decisions on resolving complaints will be legally binding on the water companies.

It is not clear how this ombudsman would yet work. Currently CCW advocates for customers - Sir Jon said if it was converted to an ombudsman it would have to be impartial.

So it may not be appropriate for previous complaints to be looked at under the new system. We are expecting the government to publish more detail on how this would work in due course.

Mark Poynting
Climate reporter

Hingle asks: The public are feeling the strain with rising bills - can't companies simply make less profit for a while?

The government announced earlier this month that investment intended for infrastructure upgrades would be “ringfenced”.

It said that should mean that money intended for investment is not diverted for bonuses, dividends or salary increases.

But today’s review also emphasised the need for water companies to attract long-term investment too.

Companies need to attract the best people, Sir Jon Cunliffe told BBC Radio 4’s Today programme earlier today.

But what annoys the public is when "the pay is there, and the performance is not", he said, and that’s when the regulator should step in.

Mark Poynting
Climate reporter

Ben asks: Halving sewage discharges from a record-high seems incredibly unambitious. What is it being halved from? What will that get us to? And when did we last see that halved level?

The pledge to halve sewage spills by 2030 relates to 2024 levels, which was a record year for the duration of spills. In other words, it's a generous benchmark.

Last year, sewage was released into England’s rivers and seas for 3.6 million hours in total, and the number of recorded spills stood at about 450,000.

It is not clear whether the pledge relates to the duration or number of spills - so halving levels could mean sewage being released for 1.8 million hours, or 225,000 spills.

There was an average of 32 spills per storm overflow monitor in 2024.

Making comparisons against other years is really challenging because spills were not routinely monitored even a decade ago.

Esme Stallard
Climate and science reporter

Mrs C Carlton asks: Will the new water regulator just be the same people who ran Ofwat under a new name?

The speed with which the government said it would accept the report's recommendation to scrap Ofwat and set up a new body with wide-ranging powers suggests it was a move they were already considering.

Going by comments from the existing regulators this morning, it seems likely that many of the staff will be the same.

Philip Duffy is chief executive of the Environment Agency, which is tasked with monitoring the impact of private water firms on nature.

Welcoming a merger, he said his staff "know much more must be done to protect rivers and guarantee clean and plentiful water – but too often they lack the means to deliver these aims".

We still don't know how the new regulator will operate or how many staff it will have - but the author of today's critical report warned the government that simply scrapping the individual agencies for a new body will not will not address the "fragmented" regulation of the industry.

Esme Stallard
Climate and science reporter

The way water is managed in England and Wales is already quite different, and today's proposed reforms deal with both. Here is what Cunliffe review says should happen in Wales:

• In Wales, 90% of land is used for agriculture, compared to 67% in England - a new National Water Strategy should reflect these differences
• A new economic regulator for Wales which is separate from England should oversee Dŵr Cymru and Hafren Dyfrdwy, the two main water firms
• The report says neither company should be allowed to self-monitor pollution and sewage spills, and it calls for increase enforcement powers
• The Welsh government should review the tariffs for people on low incomes offered by the companies and consider a national system, the report says

Simon Jack
Business editor

Image source, Reuters

One section of today's report in particular has caught the attention of the consortium hoping to restructure the embattled Thames Water.

Recommendation 58 includes a section on turning around poorly performing companies, and says the aim should be that the public interest is "not damaged by punitive measures on poorly performing companies that make it harder for them to recover".

That is precisely what the Thames Water creditor group has been arguing for, saying there is no point continuing to kick a company when it's down.

Environment Secretary Steve Reed has previously ruled out any leniency for the UK's largest water and waste company, so it will be interesting to see whether he embraces this part of the report knowing there would be cries of foul from the public and other firms.

The BBC's business editor, Simon Jack, has just interviewed Environment Secretary Steve Reed, after he announced the government will abolish Ofwat, the water regulator.

He's asked why the possibility of nationalisation was not included in the scope of today's report, as campaigners had hoped it would be.

Reed says there's "no point examining something that wouldn't work", adding that the cost would have been £1bn - "money we don't have".

He says the money required would have needed to have been taken from the NHS and education budgets, and there would have been "legal wrangling".

That, coupled with little investment while nationalisation was considered, would have seen bills go up.

Calum Watson
BBC Scotland

In Scotland, water services are provided by a single publicly-owned operator, Scottish Water, rather than private companies.

Instead of Ofwat, there is a separate regulator – the Water Industry Commission for Scotland – which sets prices.

Water and waste water charges are generally included in council tax bills for most domestic properties unless they have a water meter, where they are billed separately.

While water bills in Scotland increased by 9.9% in April, they remain among the cheapest in the UK.

This year they will average £490 annually compared to England, where bills rose by 26% this year, taking them to £603 on average with significant regional variations.

But Scottish Water has had some controversies, notably around bonuses to senior staff and sewage releases into rivers and coastal waters which historically have been less well monitored than in other parts of the UK.

Esme Stallard
Climate and science reporter

Alan Cameron, in Aberdeen, asks: Why is BBC News very carefully avoiding doing any comparison between the system of privatisation in England and the retention of the water utility in the public sector in Scotland?

Meanwhile, Chris asks: Why not nationalise water?

We've got two questions here which both touch on the issue of how water companies are run.

Depending on where you live in the UK, the water sector looks very different. In Scotland and Northern Ireland it is publicly-owned, in Wales it is mostly a not-for-profit system and in England it is private.

At the start of the review, the government said it did not want author Sir Jon Cunliffe to look at nationalisation in England as it was "too expensive" and "too complex".

Nonetheless, Cunliffe did look at some mixed models of private and public partnerships and he concluded that: "There is no clear relationship between ownership models and outcomes." What he is saying is that there are good and bad examples of both public and private water systems.

And we can see that play out in the UK. Scotland has better water quality when tested than England and better bathing waters, but it has far less data on the amount of sewage spilt.

Last year, the watchdog in Scotland concluded that just a third of sewage spill sites were monitored. In comparison, in England 100% of sites are monitored.

Esme Stallard
Climate and science reporter

Let's be clear, the ambition is to halve the illegal discharge by 2030? Edward Hayman in Southampton

On Friday, the latest data from the Environment Agency revealed a record number of pollution incidents by water companies - and the most serious cases, which cause significant harm to aquatic life and potentially human health, were up 60%.

In response, Environment Secretary Steve Reed said he wanted the number of times "sewage was discharged" to halve by 2030.

This means the number of hours untreated sewage gets poured into waterways from outflow points. In 2024, there was a record 3.6 million hours of sewage spills - not all of these will cause pollution issues but it creates a heightened risk of environmental damage.

In his report, Sir Jon Cunliffe says the way sewage spills are currently monitored is not useful or efficient, and suggests the government carries out more targeted data collection on the impact of sewage which is released to give a more accurate measure.

Image source, Reuters

What questions do you have about today's report? These might be about the water bills you pay, or how water companies are held to account for sewage in our waterways.

Our experts will be on hand with all the answers a little later on.

For now, you can get in touch in the following ways:

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The environment secretary is expected to outline further details in the Commons later after announcing the government will abolish Ofwat.

We've just learned that a new single regulator to take over the functions of the four bodies currently tasked with overseeing various elements of the industry: Ofwat, the Environment Agency, Natural England and the Drinking Water Inspectorate.

Their various responsibilities will be taken over by the new regulator, though it is unclear when it will be established by.

Along with scrapping Ofwat, the government has confirmed it will immediately sign up to four more of the report's recommendations - which leaves another 83 to consider.

Scrapping Ofwat will be the biggest overhaul of the water industry in a generation, the environment secretary says, with one regulator established where there has until now been four.

Steve Reed says the new body will oversee investment and maintenance for customers so that families are "never again hit by the shocking bill hikes we saw last year".

The new regulator "will prevent the abuses of the past", he adds, and end the "tangle of ineffective regulation" which has led to polluted waterways.

Ofwat will continue to operate until a new regulator is set up.

As we've just reported, the environment secretary is giving a speech responding to a highly critical report which lays bare the scale of problems in England and Wales' water industry.

Steve Reed says it is clear the water industry is "broken" and he confirms the government will push ahead with one of the report's most drastic recommendations: to abolish Ofwat.

He says rivers, lakes and seas are being polluted by record levels of sewage and infrastructure has been "left to crumble" - all while "soaring" bills are straining family finances.

"The lack of water infrastructure is holding back economic growth," he goes on.

Reed says that water companies have been allowed to profit at the expense of the British people, and a broken regulatory system has allowed them to get away with it.

Environment Secretary Steve Reed has confirmed the government will abolish the water regulator, Ofwat.

We'll bring you more on this breaking development shortly.

Image source, UK Pool

Environment Secretary Steve Reed is now giving a speech responding to today's critical report. You can watch live at the top of the page.

Cunliffe says the costs of producing water and waste water services are likely to increase as ageing systems are replaced and upgraded, so there must be a stronger safety net for those most vulnerable to water poverty.

He says it is for the government to decide whether to do so through water bills directly or social security.

Addressing water companies directly, the report author says they must bear "a major part of the responsibility for the failures we've seen".

Private water provision will only work if private interests of water companies and their owners are aligned with public interests of the provision of water, he adds.

Finally, Cunliffe says there is "strong evidence we're behind the game" when it comes to upgrading critical infrastructure, and he calls for a new approach to how works are carried out for the future.

That's it from the report's author for now - stay with us as we'll be listening to Environment Secretary Steve Reed in a minute or two.

The way Ofwat is set up allows water firms and their owners to operate in a way which has "badly damaged both their companies and the public's interest", Cunliffe says.

The regulator has taken its approach beyond the limits of effectiveness, to a point where it has become counter-productive, he adds.

But simply scrapping Ofwat will not address the "fragmented" regulation of the industry, he warns, before calling for integrated, reformed bodies in England and Wales to replace it.

Cunliffe continues by highlighting some of the key recommendations in his report, calling for more government intervention and the establishment of eight regional water authorities.

These would take over from other regulators, including the Environment Agency in England, and bring their existing functions together at a more local level.

Cunliffe says the current legal framework does not enable regulators and planning bodies to take decisions on how best to meet environmental objectives.

The environmental and economic regulators involved in the market "have not achieved what is needed and will not achieve what is needed".