Take the profit out of water and smash the revolving door between regulators and water industry, say Lib Dems

21 Sep 2026

EMBARGO: Immediate Release

The Liberal Democrats will use their autumn party conference to set out a radical vision to overhaul the broken water industry, launching a major new policy motion to tackle Britain’s water company crisis. Recent Freedom of Information requests by the party have revealed that dozens of former regulator employees at Ofwat and the Environment Agency have moved to roles in the water sector - laying bare why the industry has evaded reforms at every attempt.

Following years of environmental vandalism and financial mismanagement by privatised water firms, the party is calling on Prime Minister Andy Burnham to abandon the failed privatisation model and urgently develop plans to take the profit out of water through a new ownership system where billpayers are in the driving seat of their water companies. This comes as recent Times coverage revealed that water companies have had millions of pounds in loans underwritten by the Chinese state bank, highlighting the urgent need to return real sovereignty to our water system.

The newly announced policy motion, "Restoring our Waters," reveals the staggering scale of the industry's failure: since privatisation, water companies have accumulated £70 billion in debt and paid out £83 billion in inflation-adjusted dividends, compared to just £236 billion spent on infrastructure over the same period. Furthermore, an average of 3 billion litres of water is wasted every day in England and Wales due to leaky pipes, with Thames Water ranking as the worst offender at 592 million litres lost per day.

As a first step, the Liberal Democrats are demanding Thames Water is immediately placed into a Special Administration Regime (SAR) to begin its pathway to mutual ownership. This follows revelations that the UK's largest water company recklessly pumped sewage into rivers and lakes for 107,822 hours last year.

The party has also strongly condemned both Labour and the Conservatives for recently refusing to support any of the 44 amendments tabled by the Liberal Democrats to the Water (Special Measures) Bill.

Liberal Democrat Environment spokesperson, Tim Farron MP, said:

“We must smash the revolving door between the two water regulators and the industry they are meant to control. The recycling of regulator employees into the sector is an open secret, and shows just why responsibility is persistently and systematically evaded.

“The British public is utterly sick of paying through the nose for a basic utility that routinely trashes our natural environment. By transitioning water companies into customer-owned mutuals, we can take profit out of the equation without saddling the taxpayer with massive corporate debts. The new Government cannot simply tinker around the edges while our waterways and public health suffer.

“We utterly condemn the failure to fix our broken water system or protect our rivers from polluters. Labour must stop acting like campaigners and use their position in government to act now and prove they're serious about cleaning up our waterways.

“The Thames Water disasterclass is an unmissable moment for the Government to show another way is possible – mutualisation via the Special Administration Regime route. It is time to blow the final whistle on Thames Water, sack the toothless regulator, ban the bonuses, and end the sewage scandal once and for all.”

ENDS

Notes to Editors:

Policy Motion F36, "Restoring our Waters: Britain’s Water Company Crisis," will be debated at the Liberal Democrat Autumn Conference on Tuesday 22 September.
Liberal Democrat Freedom of Information requests revealed that over the past 5 years (date range reduced due to FOI constraints), 29 former employees of Ofwat took up employment in the water sector (FOI 202606126). The breakdown is as follows:
- Regulated water and sewerage companies (Thames Water, United Utilities etc): 10.
- Water industry trade bodies, lobbying groups, or industry representatives (e.g., Water UK, British Water): 2.
- Environmental or engineering consultancies specialising in or heavily contracted by the water utility sector: 17.
Over the past decade, 12 former employees of the Environment Agency took up employment, with regulated water and sewerage companies (FOI 2026/2914).
The Times coverage of water and energy firms taking millions in loans from Chinese state bank available here.
The Liberal Democrats’ comprehensive blueprint to end the sewage scandal includes calls to:
- Abolish Ofwat: Replace the current regulator urgently with a new, powerful Clean Water Authority with statutory powers to end the sewage scandal, ban unjustified bonuses, and hold water executives legally accountable.
- Mutualisation: Convert failing water companies into Mutually Owned Public Benefit Corporations that are professionally managed, jointly owned by customers, and reinvest all surpluses directly into the water system rather than paying out dividends.
- Strengthen Special Administration designation (SAR): Create an additional environmental trigger for the Special Administration of water companies to transfer operations to a mutual benefit model in cases of chronic or egregious environmental failure.
- End the Sewage Cover-Up: Require water companies to monitor and publish live volume data for sewage spills, not just the duration, ensuring pollution is accurately measured and transparently reported.
- Tackle Water Poverty: Introduce a nation-wide single social tariff for water bills to guarantee vulnerable households are protected from skyrocketing costs, as over 2.5 million households are currently in debt to their water company.
- Ban "Forever Chemicals": Pursue a four nations agreement to restrict PFAS to prevent the manufacture and release of 'forever chemicals', alongside a remediation fund requiring polluters to pay for the cleanup.