England would give local leaders, customers and businesses a formal regional role in choosing priorities for sewage, flooding and water supply under plans announced by the Department for Environment, Food & Rural Affairs on 5 November 2026. Eight proposed water councils would draw up regional plans identifying pressures, choices and potential public and private investment. The change would bring several demands on the water system into the same regional discussion, alongside the company-based financing arrangements that shaped the 2025-2030 price controls. Defra's announcement asks local leaders to propose how the councils should operate.

Key facts

  • Eight regional water councils are proposed across England.
  • Each would plan for water quality, flooding, drought and future supplies.
  • Local leaders' operating proposals are due by the end of 2026.
  • The PR24 price-control period runs from 1 April 2025 to 31 March 2030.

What would change for communities choosing water priorities?

Each proposed council would assemble a regional account of the biggest pressures on its water system, the choices between responses and the investment that could support them. Defra also proposes new powers for mayors to hold companies accountable through a strengthened Water Bill. The announcement leaves individual council budgets and the precise reach of those powers unspecified.

The geography matters because the same broad investment programme can serve different local needs. Defra points to sewage pollution affecting tourism around Windermere and water scarcity constraining growth around Cambridge. A water-quality intervention and additional supply for development answer different problems. Putting them into regional plans would make those competing priorities part of the same discussion about where infrastructure is needed.

The government is building on existing partnerships. Its announcement cites Greater Manchester's Integrated Water Management Plan, which brought planning, regulation and investment together, and Water Resources East's work on scarcity in East Anglia. It links improved drainage in Greater Manchester to town-centre regeneration and identifies Greater Cambridge's water constraints as a development issue. The proposed eight-council structure would extend a regional approach across England.

Why does a regional plan still need a financing route?

The regulatory system described by the National Audit Office in April 2025 was organised around companies with separate responsibilities. Its overview said 16 companies predominantly supplied drinking water to homes in England and Wales, with 11 also providing wastewater services. Those figures describe the system assessed in that audit; the eight proposed councils cover England.

The audit explained the division of work behind investment decisions. Ofwat set each company's funding envelope through five-year price reviews and an expected investor return reflecting risk. The Environment Agency oversaw impacts on rivers and other water bodies, including seven long-term plans and planning frameworks. The Drinking Water Inspectorate addressed drinking-water quality and sufficiency.

That separation explains a practical issue for regional planning. A region might identify flood resilience or additional supply as its priority, while the relevant company programme must also accommodate environmental requirements, drinking-water obligations and financing. A regional plan could bring those demands together before choices harden into separate programmes. Its influence would depend on how the proposed arrangements connect local priorities to the decisions on company expenditure.

Funding also involves two sets of interests. The NAO's audit linked predictable, appropriate investor returns with consumers' confidence that their money was well spent. A regional preference for a project therefore sits within a financing question: how to attract the money needed for construction while securing value for the people paying for water services.

What do five company disputes show about investment decisions?

Ofwat referred five companies' price determinations to the Competition and Markets Authority for redetermination on 18 March 2025. The disputed PR24 controls governed customer charges in England and Wales for April 2025 to March 2030. Ofwat issued its original determinations on 19 December 2024, according to the CMA's case record.

The redeterminations covered Anglian Water, Northumbrian Water, South East Water, Southern Water and Wessex Water. The CMA sent its final determinations to Ofwat on 10 March 2026 and published them on 26 March. These were company-level decisions within the five-year control period.

That review also included a route for outside input. On 25 March 2025, the CMA invited third-party submissions on issues raised by the five references and companies' statements of case, with a deadline of 22 April 2025. That consultation concerned particular disputed controls; the proposed councils would instead have an ongoing role in setting priorities across a region's water system.

Why combine supply, pollution and flood planning?

The scale of the supply problem helps explain the regional remit. The NAO's 2025 overview projected a shortfall of nearly five billion litres a day by 2050 at then-current usage rates, against daily use of about 14 billion litres. It described that projected gap as more than a third of the volume then used.

Its conclusions also identified pressure on the system's finances and delivery capacity. The NAO found that Defra and regulators had failed to encourage the spending needed for expected performance, while consumer trust and financial resilience had declined. It called for a clearer understanding of costs, asset condition and deliverability alongside the investment requirement.

Regional environmental interests bring another dimension. In Defra's announcement, Wildlife and Countryside Link chief executive Richard Benwell supported greater regional control while arguing that councils needed powers and funding to address pollution across agriculture, chemicals and wastewater. That position broadens the discussion beyond the assets of water companies to pressures affecting the same rivers and catchments.

Local leaders now have until the end of 2026 to submit their proposed operating arrangements. Defra says each council would then develop its regional plan, and further details of the government's water approach are due in a ten-year plan later this year. Those arrangements will determine how the promised local voice enters the decisions on infrastructure and expenditure.