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Labour's Water Reforms Delayed as Ofwat Remains
Developing
In Short: The water regulator Ofwat remains in place more than a year after Labour promised to scrap it, sparking uncertainty and potential strikes among its employees.
The water regulator Ofwat remains in place more than a year after Labour promised to scrap it, sparking uncertainty and potential strikes among its employees.
Speaking at the Labour Party Conference, Andy Burnham announced that Environment Secretary Angela Eagle would present a 'strengthened' bill to Parliament, but did not provide a timeline.
The decision to abolish Ofwat was initially announced last July following a review by Sir Jon Cunliffe, who criticized the regulator's handling of the sewage crisis.
Ofwat has faced criticism for allowing water companies to pay high dividends while underinvesting in infrastructure and keeping bills too low during the 2010s.
Ministers promised to publish a transition plan last year, but it has not materialized.
Members of the Public and Commercial Services Union (PCS) at Ofwat are currently balloting for strike action, demanding more information about the transition, including potential redundancies.
The OBR is concerned that Labour's target of 1.5 million new homes by 2029 may be 'unachievable' due to high house prices and rising builder costs.
What this adds
The i Paper's Save Britain's Rivers campaign has been advocating for tougher regulation of the water industry.
The OBR's reassessment of Labour's housebuilding plans includes factors such as population growth, employment rates, and inflation forecasts.
What's still developing
- Employees at Ofwat are threatening to strike, citing 14 months of "uncertainty and drift" after the Government pledged to scrap the regulator Ofwat, the failing water regulator that presided over Britain’s sewage crisis, still exists over a year after the Government said it would abolish it, with employees completely in the dark and threatening to strike.
- The move was a win for The i Paper ’s Save Britain’s Rivers campaign, which had been calling for which has been calling for tougher regulation of the water industry.
- The decision to scrap Ofwat was announced in July 2025 in response to a review by Sir Jon Cunliffe, former Bank of England deputy governor, which looked at how the regulation of the water industry could be reformed to tackle issues including sewage pollution.
- On Tuesday, Burnham said the “centrepiece” of the upcoming Water Bill would be “the repeal of Margaret Thatcher’s ideological ban on public ownership of water companies”.
- The i Paper understands that Sir Keir Starmer’s Government had developed a plan to transition regulatory powers from Ofwat, but Andy Burnham decided not to publish it, as he plans to go further on water reforms than his predecessor.
- Britain's economic watchdog is concerned that its assessment of Labour's housebuilding plans may need to be revised down Labour has such a “slim” chance of meeting its own housebuilding target that Britain’s economic watchdog is considering downgrading its growth forecast, The i Paper has learned.
- Housing market expert Neal Hudson told The i Paper that he was invited to meet with the Office for Budget Responsibility (OBR) to discuss his data and analysis as the watchdog seeks “to understand why the housing market has underperformed relative to their forecasts”.
- He was told the OBR is “looking at the growth forecast they attached to planning reform” – this was 0.2 per cent to be added to GDP by 2029/30 – and that the watchdog feared it might be “overblown” because “the homes will not be built”.
- The housing analyst said Labour’s target of 1.5 million new homes by 2029 was always going to be “unachievable” because house prices were high and builders’ costs were rising even before the general election.
- These include population growth, the proportion of people active in the labour market as well as overall employment rates and their productivity and wages, inflation forecasts and the government’s plans for tax and spending.
- Labour pledged to build 1.5 million new homes by 2029, bringing in the Planning and Infrastructure Act to make it easier to build new housing.