Water is an essential life service that has been badly managed since the 1980s privatisations. The priority for the UK must be to build a new water management structure fit for the 21st century.
To fund this transition, the P2030 programme moves **standing charges for water out of consumer bills **to direct funding from general taxation.
The annual savings per household are £220 on average.
This works the same way as a lump sum tax cut in £s for every household, paid for by a progressive tax on incomes. The standing charge on a water bill represents the costs of running and maintaining the pipes, reservoirs, and facilities. That infrastructure needs to be reorganised. Centralising that funding enables the government to manage an orderly transition to a more responsive and responsible stewardship of this vital natural resource.
Over the course of the five year P2030 programme, the water industry is reorganised into Catchment Water System Operator (CWSO) areas matching the natural boundaries of river systems, replacing Ofwat. Starting in the second year of the P2030 programme, £6.2 billion a year is allocated from National Contributions to make this transition. Initially, the funding will be distributed back to the water companies on a per-household basis, leaving current water company funding unchanged.
By Year 4 of the programme, the existing water companies will be competitively bidding for services from their new CWSO, which will receive the per-household distribution directly.
The CWSO will be responsible for all aspects of water provision, control, and quality. Where the costs of the water system exceed the national average, a CWSO can petition local councils to add a local precept to the local property tax to fund those extra costs – subject to the approval of the newly reformed local councils. This is a progressive distributional design that creates direct accountability between CWSOs and their residents.