UK Government announces abolishment of Ofwat: water bills expected to rise

Last October, an Independent Water Commission was established to review the water sector and address a number of concerns, such as polluted waterways, bill increases, pressures on the water supply, and protection for vulnerable customers.

The vision was to overhaul the current system and set out a clear plan to deliver a system fit for the future, which included making some big changes.

Ofwat’s scrapping is just one of 88 total recommendations that came from the 465-page report and one of the Independent Water Commission’s nine key recommendations. The Government has already agreed to go ahead with five of these recommendations, including the creation of a new watchdog, but more may be implemented later on.

There are a number of ways that the UK water sector needs improving according to Sir Jon Cunliffe, leader of the Independent Water Commission behind the report. One of the biggest motivations behind the decision to scrap Ofwat has been a lack of investment in infrastructure.

The report explains that years of underfunding have left the sector behind acceptable standards, and massive funding will be needed to meet the demands of an increasing population and higher environmental standards as well as to tackle the challenges of climate change and ageing infrastructure.

The cost for these big upgrades is expected to come from household water bills, so most households across England and Wales will most likely see their bills go up soon.

Ofwat said in December 2024 that they expect water bills to rise by an average of 36% over the next five years, which Cunliffe recently confirmed, stating that bills will rise by 30% over the next five years, but with this new shake-up the actual increase could be higher.

One of the recommendations made by the report to ease the pressure of rising bills is to make smart metering compulsory. This would mean that households pay water bills based on how much they’re using rather than a flat fee.

However, this is not one of the five recommendations the UK Government will be moving forward with, and no comment has been made whether it's been ruled out as an option.

Smart meters can give households greater control and oversight over their spending, which could be considered a positive in helping households manage their budgets. According to official government figures, as of the first quarter of 2025, around 39 million advanced and smart energy meters were in British homes and small businesses, with 67% of all energy meters now either smart or advanced.