It has been a busy start to the new year for water law and policy with various developments published in the last couple of weeks. Following the release in December 2025 of the Environmental Improvement Plan (EIP), which lists a number of commitments on water, Defra published a long awaited Water White Paper this week setting out the government’s action plan for water regulation. Earlier this month, we also saw Defra release details of the mandatory annual pollution-cutting plans that water companies will be obligated to produce under the Water (Special Measures) Act 2025 (the ‘2025 Act’). On the same day, the Office for Environmental Protection (OEP) issue information notices to Defra and the Environment Agency (EA) for ‘possible failures’ under the Water Framework Directive (WFD) Regulations.
We consider these developments below.
- Defra’s Water White Paper revealed – ‘A New Vision For Water’
The Water White Paper marks Defra’s intention to break with the ‘piecemeal’ and ‘disjointed’ approach of past water reforms and to focus on its ‘most critical outcomes’, i.e., delivering a safe and secure water supply, a protected and enhanced environment, and a ‘fair deal’ to customers and investors.
A large portion of the Water White Paper is dedicated, as anticipated, to the establishment of a new integrated water regulator. This new body will consolidate certain water-related roles historically played by the EA, Natural England, Ofwat and the Drinking Water Inspectorate into an integrated water regulator. There is an emphasis in the Water White Paper of the new regulator taking a ‘supervisory approach’ to regulation that will ‘shift regulation towards being more proactive and targeted to the specific needs of each water company to improve performance – while also increasing grip over water company delivery’. A Chief Engineer will sit inside the new water regulator to oversee what is described as a fundamental shift in the culture of the regulator and to provide the appropriate technical capability and engineering expertise.
Other developments noted in the Water White Paper include:
- Appointment of a chair-designate of the new water regulator.
- Establishment of a Regional Water Planning Steering Group to test new elements of the regional water planning function.
- Introduction of a Water Reform Bill to Parliament (though little is said on this beyond ‘reset’ of the legislative framework including “elements of the Urban Wastewater Treatment Regulations and exploring updates to the Water Framework Directive Regulations, where needed”).
- Introduction of a new Performance Improvement Regime (PIR) for poorly performing water companies. This will include an ‘MOT approach’ for water company infrastructure, requiring health checks on pipes, pumps and more.
- Defra’s publication of a ‘Transitional Plan’ in 2026 with an accompanying interim Strategic Policy Statement to set out how changes will happen and who is responsible throughout the development of the new integrated regulator.
This document signals Defra’s desire to bring long term stability to this critical policy area. However, there have been mixed reactions from the industry. Environmental campaigners have said of the Water White Paper that ‘without significant new government funding it will not be the radical, transformational change that we hoped for or that communities, our environment and the economy need’. Others welcomed the document as an important step towards a joined-up and outcomes focussed framework.
2. Mandatory Pollution Incident Reduction Plans for Water Companies
Implementing Pollution Incident Reduction Plans (PIRP) is a key part of the 2025 Act, which aims to strengthen the enforcement powers of the water industry regulators to tackle offences by water companies and their chief executives.
On 8 January 2026, Defra released guidance on the mandatory requirement, under the 2025 Act, for water and sewerage companies to publish PIRP by April 2026 and annually thereafter. The PIRP is required to be published on water and sewerage companies’ website and published annually, with criminal sanctions for failure to meet this duty.
The guidance contains:
- An overview of the legal requirements and regulatory actions.
- Principles for preparing and publishing both the PIPR and ‘implementation reports’ that must be published before April 2027, and annually thereafter, to show their progress in reducing water pollution incidents. Both PIRP and Implementation Reports must include a statement by the company’s chief executive that they have personally approved the plan.
- Details on the required structure and content for the PIRP and implementation reports. It is notable that, in addition to reporting the frequency and seriousness of pollution incidents, water and sewerage companies are required to detail the steps taken to maintain any structure or apparatus that has been the cause of any pollution incidents, the measures taken to reduce the occurrence, and the impact that the measures will have.
In addition to PIRP and implementation reports, the 2025 Act has a number of other notable features, including:
- The modification of the standard of proof of civil penalties from ‘beyond a reasonable doubt’ to ‘on the balance of probabilities’.
- Restricting remuneration of directors and chief executives if specific standards are not met.
- The introduction of automatic penalties for certain offences.
3. OEP Information Notices to Defra and the EA
The OEP was created in November 2021 and is responsible for holding Defra and other public authorities accountable for their obligations under environmental law.
In amongst these publications from Defra, on 8 January 2026, the OEP confirmed that it had issued information notices setting out the details of suspected failures by Defra and the EA to comply with the WFD Regulations. These possible failures relate to:
- The public authorities’ duties to exercise functions aimed at achievingthe WFD’s environmental objectives, including setting objectives for each river basin district and establishing programmes of measures.
- Not meeting requirements for setting less stringent environmental objectives and ensuring public participation in the development of River Basin Management Plans. The OEP found that existing plans for water companies were “too generic” and were implemented despite low government confidence that key improvement targets for water companies by 2027 would be achieved.
Defra and EA have two months to respond to the OEP at which point the OEP will consider ‘next steps’.
4. Defra’s EIP
The above developments follow the publication last month of Defra’s EIP. The EIP is the UK cross-governmental roadmap for improving the natural environment in England. It builds on the Environment Act 2021, setting out 10 overarching goals for environmental improvement. Each goal is accompanied by specific commitments and actions linked to measurable outcomes. The delivery of these outcomes is shared across various stakeholders including government, local authorities, businesses (including water companies), landowners, and communities and progress will be tracked through statutory targets, interim milestones, and annual reports.
The EIP includes a number of commitments and actions associated with ‘Goal 3: Ensure English Waters are clean, resilient, and plentiful’. For example:
- Commitment 25: Reduce phosphorus loadings from treated wastewater by 55% by December 2030 against a 2020 baseline. As an action under this commitment, water companies will be required to upgrade 440 wastewater treatment works by 2030.
- Commitment 29: Drive further investment to improve the water environment. As an action under this commitment, water companies, must support delivery of £24 billion of water company expenditure to improve the environment.
- Commitment 34: Ensure water companies deliver their water resources management plans, eliminating the water supply demand gap that grows to 5 billion litres a day by 2050. As an action under this commitment, water companies are responsible for rapidly developing a ‘Regulators’ Alliance for Progressing Infrastructure Development and the National Framework for Water Resources.
- Commitment 35: Modernise the abstraction licensing system, including moving it into the Environmental Permitting Regulations (EPR). Water companies (along with the EA and water users) are tasked with working with abstractors to find voluntary local solutions to reduce unsustainable abstraction or, if required, using powers to modify these abstraction licences.
If you wish to discuss these developments or water law more generally, please get in touch with a member of our Environmental, Safety, and Health team.
The authors would like to thank Jody Li (trainee) for her contribution to this piece.
