The biggest news impacting the water industry is, of course, that we now have our seventh Prime Minister in a decade. Andy Burnham has begun his premiership like a man who knows he has no time to lose in convincing the public his agenda will work – and water sits right at the very heart of that policy plan. Since beginning in the role, Burnham and his top team have announced a flurry of (albeit smaller) policy announcements, to complement the grander vision he has previously spoken about, including on utilities and the role of the state.
We know Burnham is keen to devolve centralised control and give power to the regions. It’s in this context that he could become one of the most consequential Prime Ministers for the water sector since privatisation.
Water reforms continue to take shape
Water is shaping up to be one of the key policy areas for Burnham’s government. His political focus on public control and managing failures of privatised systems points to greater sector scrutiny in every area, and water is no exception.
Although full nationalisation looks unlikely (given the relative costs would be extremely prohibitive at a time when focus on spending is elsewhere) a firmer grip, on a case by case basis, may characterise Burnham’s approach – starting with Thames Water.
The question is the lengths he will go to address challenges in the water sector. Burnham knows the time is now to deliver change, and that he likely will never have as much political capital as he does now to push through reforms.
The Cunliffe Review sets the terms
Much of what Burnham can do, he inherits from Cunliffe. The Independent Water Commission’s final report called for the end of Ofwat, a single super-regulator, and nine new regional water authorities. It represents the most sweeping change to the sector’s architecture since privatisation.
That regional model fits Burnham’s politics neatly. He doesn’t need to invent a case for devolving power in water. Cunliffe has already made it for him.
The open question is pace. Cunliffe recommended a phased rebuild over several years. Burnham may not have that long. Expect him to pull the regional authorities and stronger oversight forward, even if the full regulatory merger takes time to land.
Now is the time
Burnham’s approach will reward companies who can show they’re already changing, not just responding to pressure. That means clear evidence of public benefit, credible engagement with regional bodies, and a narrative that holds up under scrutiny. We help water companies build that case and make sure the right people hear it. Get in touch at: water@coppersconsultancy.com
Key things to know
- Water is shaping up as an early test for Burnham’s government: he’ll want to push his ‘public control’ agenda without unsettling investors so soon into taking office.
- Stronger accountability: regulatory changes already planned are still going ahead, but the government may also step in more directly on ownership.
- The changes go beyond just replacing Ofwat: the new single regulator recommended by the Cunliffe review comes paired with eight new regional water planning bodies – a shift toward local decision-making that fits well with how Burnham likes to govern.
- More strain on infrastructure: Water UK, the industry body, has warned that serious water shortages could hold up the building of over a million new homes, adding pressure on the government to secure investment in infrastructure.
- A window of opportunity: this change in leadership gives water companies a chance to reset their relationship with government before the bigger regulatory and legal changes expected later this year.