Recommendation 26

We asked whose responsibility it is to balance environmental need with affordability. Ofwat told us that there is no formal basis for making trade-offs between affordability and making improvements, nor was there in previous price reviews.87 Defra acknowledged that there had been “deep under-investment” leading to a big jump up now.88 Water UK told us that a former minister had turned down a reservoir application in the past on the basis of “no immediate need”. It also told us that it would have been cheaper to start infrastructure projects when interest rates were lower.89 First Economics told us that the previous price review was a “lost opportunity” to do more investment, and this was a collective failure on the part of the regulators, Government and companies.90 The role of the independent Water Commission