MPs on the public accounts committee said the system of regulating water companies needs ‘a complete overhaul’ to rebuild trust and ensure its poor performance improves
A “monumental scale” of work is required to turn around failing water companies, MPs have warned.
In a stark report, the Public Accounts committee (PAC) called on ministers to take urgent action in the face of looming water shortages.
It said oversight of the industry must be strengthened as it detailed a litany of failures, from soaring bills, to supply issues, to sewage pollution and leakages. MPs said the system of regulating water companies needs “a complete overhaul” to rebuild trust and ensure its poor performance improves.
The PAC said reforms to the system of regulation carried out by the Environment Agency and the Drinking Water Inspectorate (DWI) are needed “to address the fragmentation of accountability and failure to enforce current environmental standards”.
READ MORE: Bosses of six water firms banned from getting bumper bonuses under new law
In a report released today, the committee highlighted how bills are expected to rise at their fastest rate in 20 years while customer trust in the sector is at an all-time low.
And PAC’s inquiry found that 20% of people are struggling to afford their water bills while companies are implementing huge bill increases without explaining why, or how the money will be spent.
And it highlighted that the Environment Agency says there are too many offences to prosecute all those responsible for poor performance.
PAC Chair Sir Geoffrey Clifton-Brown said: “The monumental scale of work required to reverse the fortunes of failing water companies is rivalled only in difficulty by the efforts needed to repair customers’ faith in the sector.
“In the face of looming water shortages, steps must be taken immediately if the Government is to set the sector back on the right path.”
He continued: “Customers are being expected to shoulder the burden of water companies’ failings, without being told why or on what their money will be spent. It is past time that we had a low risk, low return water sector, from its current farcical state of overly complex, sometimes unregulated companies, and a culture of excessive dividends and borrowing.
“There is also a lot to be done in the regulatory sphere, with a pressing need to improve and streamline the existing regulatory regime. More must be done to stem the flow of pollution entering our waterways, as it poses a serious risk to human health and continues to degrade the quality of our lakes and rivers.
“However, regulators are overwhelmed by the number of prosecutions and appear unable to deter companies from acting unlawfully. Government must act now to strengthen regulators and support their efforts to hold companies to account.”
An Environment Agency spokesman said: “Our enforcement action has led to over £151million in fines since 2015 and we are conducting the largest ever criminal investigation into potential widespread non-compliance by water companies at thousands of sewage treatment works.”
READ MORE: Join our Mirror politics WhatsApp group to get the latest updates from Westminster