Welsh Government unveils ‘once-in-a-generation’ plan to reform water system

The Welsh Government has published a Green Paper outlining what it describes as once-in-a-generation proposals to fundamentally reform how water is governed in Wales.

The document, Shaping the Future of Water Governance in Wales, responds to recommendations made by the Independent Water Commission, which was established jointly by the Welsh and UK governments and reported in July 2025.

The Commission carried out the most comprehensive review of the water sector since privatisation, examining environmental performance, regulation, investment and public confidence.

Central to the Green Paper is a proposal to create a new, dedicated Welsh economic regulator for water. The Welsh Government says this would be backed by new legislation and a modern regulatory framework designed to encourage long-term investment, protect the environment and ensure the water system better serves the needs of Wales.

Speaking at a Dŵr Cymru site at the Lisvane and Llanishen reservoirs, Deputy First Minister Huw Irranca-Davies said the reforms were driven by the scale of the challenges facing the sector.

“Our ambition is clear and bold: clean and thriving rivers, safe and high-quality drinking water, fair and affordable services, and modern infrastructure ready for the future,” he said.

“We will strengthen accountability, rebuild trust and create a system that is simpler, stronger and more transparent.”

He warned that climate change, the nature emergency, ageing infrastructure and growing public concern about water quality meant the current system was no longer fit for purpose.

“The system we have today was designed for a different era,” he said. “It is time for a fundamental reset.”

The Welsh Government said it had already taken steps to improve water quality. Since 2022, more than £56 million has been invested in enforcement, monitoring and nature-based solutions to tackle pollution and environmental damage. Ministers acknowledged progress had been made, but said significant challenges remained.

As confirmed in last week’s Budget, an additional £5 million will be invested in water quality in 2026–27. The funding will be used to strengthen enforcement and drive further improvements in rivers and coastal waters. The fund was first established as part of a budget agreement with the Welsh Liberal Democrats last year.

The government said it remained committed to creating a regulatory environment that protects the public interest while supporting long-term investment in Welsh water infrastructure. It also confirmed it would continue working with the UK Government to seek further legislative powers and bring forward a new Water Bill.

Consultation

A public consultation on the Green Paper has now opened, with ministers inviting views from individuals, organisations and communities across Wales.

The Deputy First Minister said the reforms were about safeguarding the water environment for future generations, adding: “Together, we share a responsibility to leave our water environment in a better state than we found it. That work begins now.”

Responding to the announcement, Plaid Cymru’s spokesperson on Climate Change, Delyth Jewell MS:

“Plaid Cymru has long called for the establishment of, and committed to delivering, a new Wales-specific regulatory body for water in order to hold water companies to account for their performances and ensure better value for money for customers.

“But after years of increasing water bills, 115,000 people in water poverty, and an increasing amount of sewage being dumped into our waterways – the people of Wales will have little faith in this Labour Welsh Government’s ability to turn things around.

“Water is one of our most precious resources here in Wales. It’s a resource which has been exploited for decades in the name of large corporations, a trend that Dŵr Cymru has so far failed to buck.

“To create a water system that truly works for the people of Wales, we must see transformative change with the full devolution of powers over water, and certainty that the people of Wales will be prioritised above corporate bonuses.”

Natural Resources Wales (NRW) has welcomed the publication of the Green Paper.

Ceri Davies, Interim Chief Executive of Natural Resources Wales said: “This is an important opportunity to look at how we manage this vital resource and how the system can evolve to meet the challenges of climate change, environmental pressures and increasing demand. A strong, modern and resilient approach to water management is essential if we are to protect our rivers, lakes, groundwater and coastal waters for future generations.

“As Wales’ environmental regulator, safeguarding the water environment, ensuring sustainable water resources and supporting resilient ecosystems remain central to our role. We recognise that improvement across the system is needed, and we look forward to contributing evidence-based advice to support greater transparency, long-term investment and increased public confidence.

“We will continue to maintain robust regulatory oversight throughout this process, including our monitoring, enforcement and evidence work, so the people of Wales can have confidence that environmental standards are upheld.

“We are committed to working constructively with water companies, partners, stakeholders and the public as these proposals are explored, and I encourage everyone with an interest in Wales’ water environment to engage with the consultation and help shape a future system that works for both people and nature.”