Written question WQ97235

Welsh Water companies and their chief executives are held to account by Ofwat in their capacity as England & Wales’ economic regulator, and Natural Resources Wales (NRW) in their capacity as Wales’ environmental regulator.

The Welsh Government plays an important role by setting the overall regulatory framework and expectations on water company performance and executive remuneration through the Strategic Priorities and Objectives Statement (SPS), and through legislation such as the Well-being of Future Generations (Wales) Act 2015 and the Water (Special Measures) Act 2025.

Through the SPS, the Welsh Government engages regularly with Ofwat to set out our strategic priorities and ensure accountability for water companies when they fail to deliver on targets.

A key lesson has been the importance of ensuring regulators have sufficient powers to act decisively when water companies underperform. This year we introduced The Water (Special Measures) Act 2025, which strengthens accountability by allowing regulators to block bonuses for executives who preside over pollution, bring criminal charges against persistent offenders, and impose automatic penalties for serious breaches.

We have also learnt that accountability must be transparent and tailored to the Welsh context. That is why I jointly commissioned and welcome the recommendations of the Independent Water Commission to establish a dedicated Welsh economic regulator, which would give Wales a stronger and more independent voice to hold water companies – and their leadership – to account. Ensuring this regulator is equipped with sufficient powers of enforcement will be central to its formation. I intend to respond formally to the Commission’s recommendations in the autumn, setting out how we will take this forward.

Ultimately, keeping water companies and their chief executives accountable for their performance is essential to ensuring that customers in Wales get the service and environmental protections they rightly expect.