Wedoany.com Report on Feb 7th, The Welsh Government has recently published a green paper titled "Shaping the Future of Water Governance in Wales," proposing what is described as a "once-in-a-generation" reform of water governance. The document responds to the final report released in July 2025 by the Independent Water Commission, which conducted the most comprehensive review of the UK water sector since its privatization.
The core elements of the proposal include establishing a dedicated Welsh economic regulator and creating a new statutory framework aimed at promoting investment, improving river health, and strengthening public oversight. Key recommendations involve setting up a new water economic regulator, supported by new legislation and a modernized regulatory framework; introducing a national systems planner and catchment-based programs to coordinate company investments and environmental regulation concerning rivers, coasts, and aquifers; and enhancing environmental transparency by establishing a public data dashboard that aggregates information on discharges, river health, and enforcement.
The reform plan also includes consultations on changes to permitted development rights for water infrastructure to accelerate low-risk construction projects, while implementing safeguards for environmental protection and community engagement. Local and regional participation will be integrated into national planning, and measures for customer relief and affordability for low-income households will be discussed.
The document outlines a phased implementation timeline. The Welsh Government will first seek legislative powers from the UK Government, on the basis of which it will propose a Welsh Parliament Bill to implement localized arrangements. The new regulatory body is expected to be fully operational in the 2030s. During the interim period, two joint transition plans will be developed with the UK Department for Environment, Food and Rural Affairs to ensure regulatory continuity.
Ministers stated that the reforms aim to support long-term environmental recovery, enhance climate change resilience, and ensure service affordability, while giving Welsh communities a greater role in determining catchment priorities. During the transition, existing regulatory responsibilities, such as drinking water quality and environmental regulation, will remain applicable, and interim directions will provide clarity for businesses, customers, and investors.
The Welsh Government highlighted recent investments in water quality improvements, having invested over £56 million since 2022 in enforcement, monitoring, and nature-based solutions. An additional £5 million water quality fund is included in the 2026-27 budget to strengthen enforcement and drive improvements in river and marine environments. This fund stems from a budget agreement reached with the Welsh Parliament in 2025.
The green paper acknowledges the practical and legal complexities of the reform, as many water assets and regulatory functions currently operate on an England-Wales shared basis. The Cardiff administration stated it will seek "extended legislative powers" from the UK Government to establish a distinct regulatory framework while maintaining cross-border cooperation. Officials emphasized the avoidance of unintended impacts on cross-border assets and the environment of surrounding communities, and that dispute resolution and transparency measures will be incorporated into the statutory foundation.
The Welsh Government also proposes the development of a "Welsh Water Governance Code," clarifying board responsibilities for asset health and environmental outcomes, supported by a public performance dashboard. These proposals come at a time of growing public concern over river quality and pollution incidents, which has drawn widespread attention to the UK water sector and its regulators.
As a consultation document, ministers will shape the subsequent stages of the reform based on feedback, including discussions with the UK Government on the scope of required legislative and administrative powers. The Welsh Government stated its commitment to a systematic approach that balances environmental recovery, resilience, and public value, and plans to introduce a Water Bill once the necessary powers are obtained.
