The UK government is launching the most significant reform of the water industry in a generation, pledging to abolish the current regulator and compel companies to conduct mandatory health checks on their ageing infrastructure.
End of an Era: Ofwat to be Scrapped
Ministers will present the sweeping plans to Parliament on Tuesday, 20 January 2026. The reforms will see the existing economic regulator, Ofwat, dissolved. Its duties, along with those of three other overlapping bodies—the Drinking Water Inspectorate, the Environment Agency, and Natural England—will be merged into a single, powerful new watchdog.
The move is a direct response to years of public anger over rising bills, sewage pollution, and large executive bonuses, coupled with regulatory criticism for overseeing firms that paid dividends and accrued debt while infrastructure crumbled.
Mandatory MOTs and a Chief Engineer
Central to the new regime, outlined in a forthcoming Water White Paper, is a requirement for companies to perform proactive "MOT" checks on critical assets like pipes, pumps, and sewage works. The aim is to identify and fix problems, such as pipe bursts in cold weather, before they cause major supply failures like those recently seen in Kent and Sussex.
For the first time in two decades, a chief engineer will be appointed within the regulator to restore hands-on infrastructure inspections, ensuring firms "are not marking their own homework."
Environment Secretary Emma Reynolds stated: "These are once-in-a-generation reforms for our water system – tough oversight, real accountability, and no more excuses."
Tailored Oversight and New Powers
The White Paper details further measures to strengthen accountability. The new regulator will establish dedicated teams for each company, moving away from a "one-size-fits-all" approach to better understand individual operations. Where performance lags, it can impose tailored "performance improvement regimes" to act faster.
The watchdog will also gain new "no-notice" powers to inspect firms' security and emergency preparedness for events like infrastructure attacks or supply crises. Accountability for senior executives will be sharpened, with measures likened to those in the financial sector.
While Ofwat is unlikely to be formally axed before 2027, the government will set out a transition path soon, with a new Water Reform Bill to enact the necessary legislation.
Industry body Water UK welcomed the focus but said the emphasis "must now shift from diagnosis to delivery." Meanwhile, Liberal Democrat environment spokesperson Tim Farron argued the plans "do not go far enough," calling for a new customer-owned model.
