Policy background
The water industry was privatised in 1989 pursuant to the Water Act 1989. The regulatory regime for the privatised water industry is principally set out in the Water Industry Act 1991, and amendments made to that Act (notably in 2003 and 2014). Water abstraction licensing was introduced in the 1960s; the licensing regime is principally set out in the Water Resources Act 1991 and enables regulators to act to protect the environment and the needs of water users.
	Concerns have been widely expressed about the performance of the water industry, particularly in relation to their record on pollution 1 . The Labour Party manifesto for the 2024 General Election promised to put failing water companies under special measures to clean up water. This Act addresses those concerns and fulfils that commitment. The measures in the Act aim to turn around the performance of the water industry as a first step in enabling long-term and transformative change across the water sector.
	The Act includes measures to:
strengthen the power of the water industry regulators;
provide greater transparency around water company actions to tackle pollution incidents;
enable independent monitoring of every outlet by requiring data from emergency overflows to be published within an hour of a discharge occurring. This requires companies to install and operate monitoring equipment at all emergency overflows, and for the near real time data on their operation to be scrutinised by the independent regulator;
ensure water companies and their executives are held to account; and
modernise the existing special administration regime for the water industry, strengthening the Government’s control in this space and bringing the regime in line with special administration regimes in other sectors.