Pathway to stronger public control of the water industry revealed
The UK Government will remove share ownership limits on major water companies to enhance public control, accountability, and environmental standards while maintaining private investment.
The Prime Minister announced plans to abolish existing restrictions on government share ownership in England’s major water and sewerage companies, citing the need for stronger public oversight of essential services. Current limits, set by the Water Act 1989, cap government shareholding between 1-3% depending on the company, a restriction not present in other sectors. The move aims to address failures by water companies in meeting customer and environmental expectations. The Government emphasised that private sector investment remains critical to the sector’s future despite the proposed changes.
The announcement grants the Government broader flexibility to intervene in ownership models or provide targeted support where necessary, while adhering to fiscal rules confirmed at the Budget. This includes potential measures to enhance accountability and influence over water companies’ priorities. Local leaders, including mayors, currently lack sufficient power to shape company decisions or enforce accountability, a gap the reforms aim to address. Further details will be outlined in a forthcoming 10-year plan for Britain, expected later this year.
The strengthened Water Bill will remove historic barriers to public ownership, allowing the Government to act when companies underperform on environmental or customer service standards. The reforms do not alter the fundamental reliance on private investment but introduce mechanisms for greater public oversight. The Government will collaborate with regulators, investors, and companies to balance reform with market stability. This approach seeks to ensure essential services operate in the public interest while maintaining economic and operational viability.
The Prime Minister highlighted the need for water services to prioritise people and places, framing the reforms as part of a broader effort to restore public confidence in critical infrastructure. The 10-year plan will serve as a blueprint for stronger public control over essential utilities, embedding accountability and performance standards. The Government’s commitment to fiscal discipline ensures reforms will be implemented without compromising financial stability. Stakeholders will be engaged as the strengthened Water Bill progresses through Parliament.