Recommendation 7

Defra seems to be passively waiting for the Water Commission to report before making changes to the system. Defra has acknowledged the need for a complete reset of strategic planning and has committed to accepting the recommendations for the Water Commission, but it expects they may take legislation to fully implement. This scale of change must be carefully managed to avoid making the sector even more unpredictable. Both Defra and the regulators recognise that change cannot wait until the Commission makes its recommendations. The EA and Ofwat are working to improve their information sharing, and the EA is planning to increase its water inspection programme up to 10,000 inspections a year. However, neither Ofwat nor the EA has yet set out when they will use the powers they have been granted by the Water (Special Measures) Act, despite citing them as key to improving company performance. There should be a very clear sense of urgency around the changes that are needed. The regulators and the sector can and should act now to win back trust and move away from the unacceptable performance of the past. recommendation a. By Autumn 2025, Ofwat and the Environment Agency should publish a roadmap to implementation of their new powers, including those under the Water (Special Measures) Act 2025. Defra should not wait for the Water Commission to take actions where it can see an immediate need as those powers are embedded, such as the Environment Agency’s new powers to impose civil penalties and Ofwat’s powers over executive bonuses. b. Defra must set out a clear roadmap and timeline for future changes, as part of its response to the final report of the Cunliffe review. The final report is due in summer 2025 and we expect Defra’s roadmap to follow in autumn 2025. 7 1 Planning and acting for the long-term future of the water sector Introduction