UK water industry requires broad reforms, no single solution. The Cunliffe review, led by former Bank of England deputy governor Sir John Cunliffe, is the most extensive examination of the sector since its privatisation in the late 1980s. In his interim findings, Cunliffe, chair of the Independent Water Commission, highlighted systemic failures causing crises over sewage spills and failing infrastructure. These failures include inadequate government strategy, poor regulation, and some water companies not acting in the public interest. Thames Water, the UK’s largest supplier, faced a significant setback as a rescue deal with KKR collapsed, pushing it towards a special administration process.
Cunliffe recommended legislative changes to rebuild trust and improve the water system for the future, potentially streamlining the current legislative framework. He suggested a fundamental strengthening and rebalancing of Ofwat’s regulation, advocating a supervisory approach similar to the banking sector. The review noted limited understanding of the industry’s infrastructure, suggesting regular reporting to prevent failures. Cunliffe emphasised the need for ambitious reforms, citing a strong consensus on the system’s ineffectiveness. The government, however, has ruled out nationalisation due to costs and uncertainties.
