Welsh Government Unveils Ambitious Plans for Dedicated Water Regulator
The Welsh Government has published comprehensive long-term proposals for significantly strengthening regulation within the water industry across Wales. These major plans would involve establishing a new, dedicated Welsh economic regulator specifically for water, which would ultimately replace the current regulator, Ofwat, within the nation.
Legislative Pathway and UK Government Approval Required
For these transformative proposals to become reality, they would require new legislation and an updated regulatory framework designed to encourage substantial investment, rigorously protect the environment, and deliver a water system that genuinely works for the people and economy of Wales. Crucially, the government consultation document explicitly states that implementing these plans would necessitate the UK Government agreeing to devolve further powers to Wales.
This requirement for additional devolution comes at a time when the current UK administration has faced criticism for refusing similar transfers of power in other policy areas, such as justice. The long-term strategy forecasts that the necessary legislative changes would likely occur between 2026 and the 2028-29 period.
Catalyst for Change: Public Anger and Environmental Concerns
This decisive move follows a catalogue of sewage scandals and mounting public anger over the performance of water companies, which prompted a major review calling for a complete overhaul of industry oversight in both Wales and England. The 88-page consultation paper acknowledges that Wales now faces a new reality, confronting climate and nature emergencies alongside persistent challenges that demand urgent and decisive action.
The report states emphatically: "The water system designed for a different time no longer meets the needs of our people, our environment, or our economy. We have made good progress but people across Wales are rightly concerned about sewage discharges, outdated infrastructure, and the condition of water in their communities. We cannot stand still. It is time for a fundamental reset."
Proposed Measures and Strategic Vision
The government's vision outlines several key measures that need to be implemented:
- A Separate Regulator for Wales: This would aim to strengthen public confidence and support long-term investment in critical infrastructure and environmental protection.
- Clear Strategic Direction: Establishing a coherent, long-term strategy that articulates national priorities, sets interim targets, and provides a robust framework for delivery across all relevant sectors.
- System Planning Shift: Moving from a fragmented and process-heavy planning approach towards a more coherent, outcome-focused system that delivers tangible results.
- Integrated Long-Term Planning: Developing a longer-term integrated plan covering water resources, supply, drainage, wastewater, and environmental water quality to inform investment priorities.
- Reducing Network Blockages: Working proactively with the water industry to prevent inappropriate materials like wipes, sanitary products, and fats from entering the network, thereby lowering maintenance costs and strengthening system resilience.
Implementation Timeline and Industry Response
The proposed timeline suggests the establishment of a new Welsh economic regulator and system planning function for water from 2028 until the early 2030s, with a fully operational economic regulator for water in place from the mid-2030s onwards. The report acknowledges that reforming governance, enforcement, and monitoring in Wales will be a "complex and interdependent process" that must begin with a comprehensive review of existing frameworks.
Throughout this transition, effective engagement with the UK Government will be essential, particularly during the period when regulation of Welsh water companies continues through the new UK Government water regulator, until the dedicated Welsh regulator is fully established. The report does caution that such significant changes could potentially lead to confusion, resistance, or unintended consequences, and that reforms might be perceived as punitive or overly centralised if not carefully managed.
Stakeholder Reactions and Calls for Action
Afonydd Cymru, representing river trusts across Wales, told media outlets that the proposals provided "a beacon of hope" but urged the government to act with urgency. Chief executive Gail Davies-Walsh noted that "it must be remembered that it is just a consultation at this stage and nothing yet is set in stone," adding that the "thorny question of funding was not resolved either."
Interim chief executive of Ofwat, Chris Walters, welcomed the Green Paper, stating it sets the framework for the future of the water sector in Wales. He remarked: "The creation of a dedicated regulator for Wales will strengthen scrutiny and accountability within a framework designed specifically for Wales, marking an important evolution in how companies will be overseen going forward." He also highlighted that the 2024 Price Review had already approved record investment in Wales exceeding £6.3 billion.
Derek Walker, the Future Generations Commissioner for Wales, described the plans as "a wake-up call for the water industry" and an overdue opportunity to address historical problems. He emphasised the need to ensure that securing healthy waters for Wales becomes a priority for both the UK Government and the next Welsh Government, with everything done to ensure the transition happens without delay.
Government Commitment to Fundamental Reset
Deputy First Minister Huw Irranca-Davies reinforced the government's commitment, stating: "Our ambition is clear and bold: clean and thriving rivers, safe and high-quality drinking water, fair and affordable services, and modern infrastructure ready for the future. We will strengthen accountability, rebuild trust, and create a system that is simpler, stronger and more transparent."
He concluded with a powerful message about the current imperative: "Wales now faces an urgent reality. Climate and nature emergencies, ageing infrastructure, and public concerns about water quality demand decisive action. The system we have today was designed for a different era. It is time for a fundamental reset." The consultation period will now allow for detailed responses from stakeholders across Welsh society before any final decisions are made on this potentially transformative policy direction.
