Households will “never again” face huge rises in water bills, the environment secretary has claimed, following a report into reforming the “broken” industry.
Steve Reed said recommendations set out in the review will “prevent the circumstances” that have led to an average 30% rise in household water bills between now and 2030.
The report by Sir Jon Cunliffe, a former Bank of England deputy governor, has suggested the compulsory installation of smart meters in homes to keep on top of water costs, as well as scrapping the regulator Ofwat.
Campaigner Feargal Sharkey said “corporate greed”, “exploitation of bill payers and the environment” were at the heart of the industry’s problems.
He also criticised the government for limiting the scope of the report to exclude renationalising the water industry in England and Wales.
Last year, Ofwat announced that water bills in England and Wales would increase sharply over five years to raise £104bn to invest in infrastructure.
Water bills for households in England and Wales have risen by £10 per month on average, although costs vary depending on suppliers.
Meanwhile, pollution incidents in England have hit a new record.
On Friday, the latest data from the Environment Agency revealed a record number of pollution incidents by water companies – and the most serious cases, which cause significant harm to aquatic life and potentially human health, were up 60%.
In response, Reed said he wanted the number of times “sewage was discharged” to halve by 2030.
Water companies have long claimed that they have been held back from investing in the country’s pipes and sewage treatment facilities because Ofwat limited price increases for customers.
The report said that customers’ water bills had declined by 15% over the last decade when taking inflation into account.
However, since being privatised in 1989, water companies have paid out at least £54bn to shareholders, including to overseas investment funds.
Sir Jon told the BBC there had been a “really huge rise in bills” over the past year.
He added: “The inescapable fact is it costs more to produce drinking water and it costs more to deal with our waste water as we go forward – climate change, ageing infrastructure, population growth, development – these put pressure on the system.”
He has suggested establishing a single regulator in England to replace Ofwat, the Drinking Water Inspectorate, and the Environment Agency’s water responsibilities with a similar body for Wales.
Reed said that having a single regulator would mean it could better oversee maintenance and investment in water infrastructure so that “hard working British families are never again hit by the shocking bill hikes we saw last year”.
He added: “The reforms that we’re bringing in are intended to prevent the circumstances that led to those bill hikes.”
However, other campaigners said that the review did not go far enough to fix the system.
“The report diagnoses symptoms but avoids the cure,” said James Wallace, chief executive of River Action.
Surfers Against Sewage (SAS) said the recommendations were simply “putting lipstick on a pig”.
Its chief executive Giles Bristow said the report “utterly fails to prioritise public benefit over private profit”.
In his 88 recommendations to reform the water industry, Sir Jon said installing smart water meters in homes would mean people will be charged for what they use rather than paying a flat fee.
