Episode 1: Can Britain avoid a water crisis? An interview with the Interim CEO of Ofwat

Future of Utilities Podcast 

Can Britain avoid a water crisis? An interview with the CEO of Ofwat 

Lindley Gooden: Hello, I’m Lindley Gooden. Welcome to the Future of Utilities podcast. Great to have you with us today, and great to have you here at the Summit. Let’s talk about the UK’s water challenge with Chris Walters, chief exec of Ofwat. I’ve told you your title already – tell us a bit about what you’re up to. 

Chris Walters: Good morning, and thanks so much. I’ve been at Ofwat for three years. Before that, I worked for NHS England for about eight years, and before that my background was in antitrust – I worked for competition authorities as a trust-buster. By training, I’m an economist. 

I like jobs where there are real challenges, jobs that rely on my professional background in economics, and jobs in public service where there’s a chance to make a genuine difference. Those three things come together perfectly in water regulation right now. 

Lindley Gooden: You appear to have chosen one of those jobs. Let’s start with the tough stuff. The Environment Agency has asked us to be ready for a 1-in-500-year drought by 2040. I know that’s speculation, but it’s an important issue. How do you feel about that warning – and how prepared are we as an industry? 

Chris Walters: It is a projection, yes. But if there’s one thing people should take away from this conversation, it’s that those future challenges are here today. They’re real, and we can and must do something about them. 

The Environment Agency predicts that by 2055 we face a shortfall of 5 billion litres of water a day. That’s hard to picture, so let me reframe it. We’re sitting here on the 10th of June, and the men’s football World Cup kicks off tomorrow – so, using a football analogy, 5 billion litres of water a day is the equivalent of four Wembley Stadiums full of water. A more everyday way of putting it: it’s the equivalent of 22 million people leaving a tap running for 20 minutes. 

We need an approach to tackle that, and I think there are three parts to it. There’s the record level of expenditure and investment we gave the green light to in our most recent regulatory cycle, PR24. 

Lindley Gooden: And how much is that? 

Chris Walters: £104 billion of expenditure and investment. That includes £1.7 billion to roll out 10 million smart meters – the biggest smart meter rollout this country has ever attempted. It also includes more funding for companies to improve their assets and reduce leakage. Leakage has come down about 9% over the last five years, which is good, but we need to go much further. So we’ve built in incentives and funding for companies to double the rate of improvement – from a 9% reduction to a 17% reduction over the next five years. But we need to go further still. 

Lindley Gooden: When you’re dealing with numbers on that scale, it’s difficult to make them feel real. I suppose it’s about bringing it back down to us as individuals, and how we can help – because ultimately it’s helping us too. If we act now, we can head off bigger problems later. Do you feel confident people will get behind that? 

Chris Walters: If we can have a better conversation about water right now – because we’re all feeling it – then perhaps we can all make a difference. I think there are two aspects to that. Public consent is incredibly important. Part of the solution is new infrastructure. Part of it isn’t – it’s about changing our relationship with the water environment, so we start behaving as stewards of it. 

On the investment side, there’s a £50 billion pipeline of 30 major projects over the next 15 to 25 years. That includes nine new reservoirs – we haven’t built reservoirs in this country for decades – nine new large-scale water transfer projects, and around a dozen other projects, including desalination and water reuse. But that’s not enough on its own. That extra supply will only make up about a third of the 5-billion-litre daily shortfall we’re facing. The rest has to come from changing our relationship with water, which is why we’re launching a water efficiency campaign later this month. 

Lindley Gooden: What’s that about? Is it about starting a conversation, or doing something practical? And how will you measure whether it’s working? 

Chris Walters: We’re hoping for a genuine behaviour-change campaign. I mentioned I worked for the NHS for eight years – I’ve seen firsthand how effective, and cost-effective, behaviour-change campaigns can be, and we need this one to do the same. 

In the past, I think we’ve been good at explaining to the public how to save water, but not so much why. We need people to appreciate that there’s a direct relationship between the water coming out of their taps and the water in the natural environment – we’re taking more out than we’re putting back. A behaviour-change campaign needs to give people awareness of that problem, the capability to do something about it, and the motivation to act collectively. 

Lindley Gooden: It’s not just Ofwat’s job, though – it’s every water company’s job too. Everyone needs to play their part and actually listen to customers. People may not want to be told to save water again this summer. So what can we all do to start that conversation honestly? We’re in the age of AI now, where we can communicate very clearly, and a lot of us are doing exactly that. How do we find genuinely innovative ways to save water so we’re all better off? 

Chris Walters: There are some obvious things people already know. The campaign is partly about reminding people: turn the tap off while brushing your teeth, take shorter showers, collect rainwater for the garden if you’re lucky enough to have one. 

Lindley Gooden: Something I need to do – I’ve forgotten every year. I’ll actually do it this summer. 

Chris Walters: Your domestic appliances almost certainly have water- and energy-saving features too. But the campaign is about more than the how. It’s about realising, as a society, that we need to become stewards of our water environment – and that means changing our behaviour. 

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Lindley Gooden: There’s a big structural change happening too – Ofwat, the Environment Agency, Natural England and the Drinking Water Inspectorate are coming together as a single super-regulator. How do you make sure that doesn’t dilute the campaign you’ve just described? How does the big picture not turn into just another policy measure, rather than something people can actually act on? 

Chris Walters: It’s incredibly important that there’s public consent for the reforms taking place. The public wants and deserves better regulation than it’s had in the past, and the government’s ambitions, set out in the white paper, exist to deliver that. But the public will only give its consent and support if it sees what it’s getting for its money – particularly as water bills go up. 

So alongside that reform programme, we have to deliver the improvements people are already paying for: better day-to-day water and wastewater services, visible progress on the major projects, and genuine engagement with the water efficiency campaign. All of that is what gives the regulatory reforms public legitimacy. 

Lindley Gooden: Trust is earned, isn’t it? Especially now, in the age of social media and instant communication, it matters that people feel they have real power to do something positive – and I think there’s a genuine appetite for that. What would you like to see in terms of how the sector converses and drives change? It needs to happen quickly, and probably quite subtly. Is there a mindset that has to shift, or a behaviour? 

Chris Walters: I think you’ve put your finger on the crucial factor: trust. The water sector as a whole isn’t operating from a place of trust – not with the regulator, and not with the public – and we have to rebuild that. That begins with those of us in the sector trusting each other more. The relationship between the regulator and the regulated has been pretty antagonistic in the past. We need to set that aside, recognise collectively that we all need to do more, so the public can see what it’s getting – and starts to trust us. 

Lindley Gooden: One final thing, and I know this might not boil down to a simple answer – but in terms of the relationship between Ofwat and the water companies, and by extension the rest of us, what would you say about building that relationship so the difficulties of the past can be put behind everyone, for the greater good? 

Chris Walters: I think we need to buy into a shared vision. I’d love a water sector the nation can feel proud of – companies that act as genuine stewards of these precious resources. And on the journey between where we are now and that place, I want regulation to be seen as an enabler of change, not a blocker to it. My one rallying cry to the sector as a whole is: let’s get behind that vision. 

Lindley Gooden: Chris, thank you very much – and thank you for being so honest with us. Really appreciate that. 

Chris Walters: You’re welcome. Thanks for having me. 

Lindley Gooden: Thanks for joining us on stage. That’s it for now from the Future of Utilities podcast – great to have you with us. 

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