FAILING water regulator Ofwat could be abolished as the British and Welsh governments have announced an independent review of the sector.

The announcement comes as the regulator has failed to curb bill increases while fat-cat water bosses have asked for even bigger price hikes.

Amid public fury over bills, bonuses and sewage pollution, fresh figures released by Ofwat today revealed the latest requests by water firms would see the average bill in England and Wales grow by 40 per cent by 2030, rising to £615 per year.

Britain’s biggest water firm Thames Water, which is in emergency talks over a £15 billion debt pile and a worsening financial situation, asked for a 53 per cent rise.

Earlier this year, companies asked Ofwat for bills averaging £585 by 2030, an increase of about one-third from the current average of £439.

This summer, the regulator pared back those requests to an average of £535 in its draft price review in July.

But now, after a consultation period, 10 of the 11 water companies have come back with even higher requests than before.

The same companies have paid execs over £9 million in bonuses in the last year despite paying millions in fines for discharging raw sewage into waterways. Thames nearly doubled its payouts to executives, while Severn Trent paid out £3.36m in bonuses while coughing up £2m in fines for “reckless” pollution.

The regulator is due to make a final decision on bill increases on December 19, with companies going to the negotiating table with regulators between now and then.

Former deputy governor of the Bank of England Sir Jon Cunliffe will meanwhile chair the largest review of the sector since privatisation, the British and Welsh governments said.

It will focus on the water sector and its regulation, and will have no limits in the scope of its potential recommendations, including wholesale reform of Ofwat and how it interacts with other watchdogs such as the Environment Agency.

Its recommendations will be handed to ministers in the second quarter of next year.

They will not affect the current round of price rises, which takes place every five years.

GMB union has said the state of the water industry shows that Ofwat has failed and a new regulator is needed. 

It also called for water bosses’ bonuses to be capped in line with company performance at its annual conference this year.

The union’s national secretary Andy Prendergast told the Morning Star: “Water privatisation is a disastrous experiment that has cost the public and water workers dearly.

“Sewage pumped into our pristine waterways, billions of gallons lost to leaks and zero investment while bills rocket and shareholders and directors trouser millions.

“The water industry is one that has catastrophically failed under privatisation and needs root and branch reform. If Ofwat isn’t up to the task then it must be abolished for a new regulator.”

Campaigners holding a march for clean water in central London on November 3 criticised the review for being deaf to popular calls to nationalise the sector.

We Own It lead campaigner Matthew Topham said: “The review is deaf to the calls of the public, anti-sewage groups and the international community to wrestle with the root cause of the sewage crisis: privatisation.

“Without serious thought, this Labour government will be remembered for its re-privatisation of England’s water system — repeating a failed experiment which has been studiously avoided the world over.”

Surfers Against Sewage CEO Giles Bristow said the review is “a now or never moment to deliver the radical reform that will end profiting from pollution and kickstart the revival of our wild waters.”

He warned that “water company lobbyists and shady investors will be doing all they can to ensure this review barely skims the surface of this deeply flawed system.”

River Action’s chief executive James Wallace said: “The Water Commission must deliver a fully funded national action plan to end pollution for profit, enforce laws, and reform regulators.”

Greenpeace UK Policy Director Dr Doug Parr said whether the review will bring about “the transformative change we need depends upon balancing the demands of investors with a commitment to properly enforce more effective regulation.”

He said: “Too much emphasis on making the sector attractive to big international investors like Macquarie is the exact reason why our waterways are in such an appalling state today.”

The launch of the commission follows the introduction of legislation to bring criminal charges against water executives and a ban on bonuses, the Environment Department (Defra) said.

Environment Secretary Steve Reed said: “Our waterways are polluted and our water system urgently needs fixing.”

Huw Irranca Davies, Wales’ deputy First Minister with responsibility for climate change and rural affairs, added: “This vital review couldn’t come at a more urgent time for our water environment and water industry.”

Ofwat chief David Black welcomed the review.