WIREDGOV

Ofwat is launching a consultation today, 14 August, on proposals to ensure water companies involve consumers and listen to their views in key decisions that have a material impact on them. This follows action by government to give Ofwat new powers to issue rules about remuneration and governance under the Water (Special Measures) Act 2025.  

Joint research conducted with the Consumer Council for Water (CCW) shows that consumers see a role for the public to effect change in the water sector and want to hold companies accountable where they perform poorly and have the greatest direct impact on the public or environment.   

Water companies will now, for the first time, not only have to listen to customers’ views and feedback but also must ensure that customers are involved in any decision making that will affect them.  

Ofwat has acquired new powers under the Water (Special Measures) Act 2025 to set rules about remuneration and governance. The consumer involvement rule covers three areas:  

• Ensuring that companies take decisions with an informed understanding of consumers’ views and preferences.  
• Creating decision-making arrangements within companies that involve consumers.  
• Improving companies’ understanding of the impact of past decisions on consumers.  

We are seeking views on the proposed rule and guidance and ask stakeholders to make us aware of any considerations or challenges with implementation that they foresee. We encourage all interested stakeholders to respond to this consultation, which will be open until 1 October 2025.   

Ofwat has already begun implementing the first rule issued under these new powers, the performance-related pay prohibition rule. You can read more about this here.  

Following the publication of the Independent Water Commission final report, the UK government has set out a new direction for the water sector with the formation of a new regulator in England. This marks an opportunity to reset the sector, so it delivers better outcomes for customers and the environment. 

As the report states, this rule aims to strengthen consumer representation by offering direct engagement with consumers. 

Ofwat will now work with the government and other regulators to form this new body in England, combining Ofwat with the Drinking Water Inspectorate and including elements of the Environment Agency and Natural England. We will also continue to engage with the Welsh Government and contribute to discussions on the options for Wales.  

Until these new arrangements are in place, we will keep working hard to drive water companies to improve performance and deliver maximum value for customers, communities, and the environment.