Water bills set to rise by more than expected

Customers have been furious at the scale of spills and pollution while investors have claimed the bills they have been allowed to charge are insufficient to attract the investment needed to fix the problems.

Some companies have been caught in what one executive described as a “doom loop” – with underperforming companies fined for sewage discharge and leaks leaving them with even less money to fix the very problems they have been fined for.

Investors have also been condemned for the dividends and executive pay they have paid out while pollution and leaks have risen.

In short, no-one is happy with the current set up.

Ofwat is expected to welcome the plans to establish the new commission.

However, many see it as a reflection of widespread dissatisfaction with the way the industry has been regulated, with some claiming that Ofwat got the balance wrong between keeping customer bills low and encouraging investment.

The new commission is not expected to report back until after Ofwat has made its final decision on how much bills may rise by 2030.