Eagle plans to intervene in Ofwat's water price review

UK Environment Secretary Angela Eagle plans to intervene in the next water price review run by Ofwat, the regulator that sets the charges water companies can levy on customers. According to The Guardian, she intends to direct companies on bills, costs, leaks and sewage overflows.

In a letter to water regulators and company chief executives in England and Wales, Eagle wrote that the review must prioritise affordable bills and value for money for customers. She warned that it would not be a business-as-usual review, but the start of a long-term transition to a different model for the sector. The next Ofwat price-setting process is expected to conclude in 2029.

Ofwat's five-year reviews analyse water companies' business plans to decide what customers will pay. Until now, the government has not intervened in that process. Eagle was appointed to lead the Department for Environment, Food and Rural Affairs (Defra) on 20 July 2026.

Defra sources said the government's 10-year plan, due after next week's budget, would give ministers more robust powers to lower water bills and direct local investment. The government has also said it intends to increase public control of the water industry to deliver cleaner waters, fairer bills, stronger accountability and better outcomes. In early September, Eagle said the government was prepared to change the law to reform the industry.

The pressures on the sector have been building in recent months. In August, Ofwat approved 13 water companies to spend £3.4bn more than planned, including to support new homes and datacentres. In October, the owner of South West Water cut its dividend, the payment to shareholders, and asked investors for fresh cash to fund infrastructure work.

Thames Water has drawn particular attention. In July, investors pursuing a rescue bid offered the government a "golden share", a special stake that can carry veto rights, in the company. In September, shareholders described the company's revised 2025-30 business plan as "uninvestable" after Ofwat responded to it. A report that month said Ofwat and the government should withdraw from negotiating with a consortium of distressed-debt specialists over the company.

Water bills are expected to fall by £240 million by 2030 through penalties on underperforming suppliers, according to The Independent.