The short version
- New consumer panels intended to hold water companies accountable are being designed with input from the industry they regulate.
- Critics label the process a conflict of interest, arguing it prevents genuine redress for customers facing rising bills and service outages.
- The government defends the engagement as necessary for practical implementation while promising broader regulatory overhauls including a new ombudsman.
The UK government’s initiative to empower water customers through new accountability panels is facing sharp criticism from campaigners who argue the process has been compromised by industry influence. Documents obtained through freedom of information requests reveal that the Consumer Council for Water, the body tasked with establishing these consumer boards, has actively sought advice from water companies on how they wish to be held to account. This revelation has sparked accusations that the reforms are designed to protect utility interests rather than serve the public.
The controversy centers on the creation of what ministers have termed powerful consumer panels. These groups are intended to give residents in England and Wales a direct voice in questioning local water executives and seeking redress for persistent issues such as sewage discharges, water shortages, and rising costs. The government promised these boards last year as part of a broader strategy to fix an industry widely viewed as broken and unresponsive to customer needs.
However, the involvement of water firms in the design phase has raised serious concerns about conflicts of interest. Critics point out that allowing monopolies to shape the mechanisms of their own oversight creates a fundamental flaw in the system. Feargal Sharkey, a prominent water campaigner, described the arrangement as a stitch-up, arguing that it places decision-making power in the hands of those accused of extorting customers rather than empowering the victims of service failures.
The backdrop to this dispute is a worsening crisis in the UK water sector. Large areas of south-east England have experienced prolonged periods without running water due to faults at treatment centers. Nationwide hosepipe bans have remained in place for months as companies fail to invest adequately in reservoir infrastructure. Meanwhile, residents continue to face increasing bills while sewage pollution remains a persistent environmental and public health concern.
Current mechanisms for customer redress are widely considered inadequate. Signing up with the Consumer Council for Water is voluntary for utilities, meaning many customers find it difficult to get responses or proper compensation when services fail. In many cases, local members of parliament are left to resolve individual complaints that should be handled by the companies themselves. Complaints received by the council surged by eighty percent in the 2025-26 period compared to the previous year, despite no increase in resources to handle the volume.
The Consumer Council for Water has pushed back against the characterization of its actions as a capitulation to industry pressure. A spokesperson stated that engaging with water companies was necessary to work through practical logistics, such as ensuring chief executives had sufficient notice to attend accountability sessions and that action plans were prepared in time. The council denied that it consulted firms on how they wanted to be held accountable, framing the dialogue instead as a procedural necessity for effective implementation.
Prime Minister Andy Burnham faces mounting pressure to take more drastic measures, particularly regarding Thames Water, which is struggling with financial insolvency. Plans to bring the company under public control have been delayed due to fears of legal challenges from creditors and concerns within the Treasury about the potential costs. The government is also preparing to introduce a new water bill to parliament that would replace the current regulator, Ofwat, with a body possessing stronger supervisory powers similar to those overseeing banks after the financial crisis.
The proposed regulatory overhaul includes appointing experts to work inside water companies to ensure legal compliance and environmental improvements. Additionally, the government plans to introduce an independent water ombudsman to strengthen customer protection and resolve complaints more quickly. A Department for Environment, Food and Rural Affairs spokesperson emphasized that the current system has failed the public interest for too long and that these changes represent a first step toward building a water system that actually works.
Sources behind this briefing
Go to the original reporting
- The Guardian World↗Labour’s new powers for water customers are a ‘stitch-up’, say campaigners
