Delivering the 88: Why technology will make or break water sector reform

The UK water sector is facing a systemic challenge. Decades of underinvestment, rising public concern over pollution, and performance failures have led to a perceived credibility crisis. In response, the UK and Welsh Governments commissioned an Independent Water Commission to chart a path forward. The report sets out 88 recommendations - one of the most far-reaching reform blueprints in the sector’s history.

Why this commission, and why now

The Commission was established amid mounting pressure from environmental NGOs, public outcry, regulatory scrutiny, and parliamentary concern. Trust in water companies is declining, and reports highlight infrastructure decay, permit breaches, and opaque governance across some organisations. An independent review was needed to propose structural reform.

The report makes bold proposals. In England, it recommends creating a single powerful regulator by integrating Ofwat, the Environment Agency, Natural England, and the Drinking Water Inspectorate - alongside supervisory models, regional system planners, and long-term frameworks beyond the next price review. In Wales, it proposes a national water strategy and a new approach to economic regulation.

A significant number of recommendations reference IT, data, digital systems, automation, cyber security, and emerging technologies. What’s clear is that robust, secure, future-ready digital infrastructure will be essential to deliver successful outcomes across the sector.

Technology as the enabler of reform

The Commission’s eight chapters span strategic direction to implementation. Several recommendations specifically illustrate how digital enablers will be critical:

Regulatory transformation through data and AI

Recommendation 25 calls for reforming operator self-monitoring - moving from manual, inconsistent processes to digital platforms, AI analytics, and third-party data. This is about enabling adaptive, evidence-led regulation.

Smart metering for demand management and trust

Recommendations 37 and 39 focus on metering across household and non-household sectors. Standards are fragmented. With CGI having delivered Central Market Operating Systems (CMOS) for the business retail market, there’s a clear opportunity to extend these principles. A centralised, standards-based household data platform could support transparency, equity, and pricing reform.

Digital twins and asset health

The report highlights poor asset condition data and a lack of long-term planning. Recommendation 66 calls for improved monitoring and resilience standards. Meeting these needs means shifting from reactive maintenance to predictive planning - making digital twins’ essential solutions. As AI and machine learning evolve, the sector must apply cross-sector learning to harness better insights.

Cybersecurity and operational continuity

Recommendations 68–71 position cyber threats as systemic. Convergence of OT and IT increases risk. It recommends the sector needs cyber assurance frameworks aligned with national infrastructure standards and maturity models across growing delivery chains.

Catchment intelligence and environmental monitoring

Recommendations 13 and 26 emphasise flexibility and interoperability in environmental monitoring, including tools like eDNA, remote sensing, IoT and AI. These require strong data pipelines, cloud analytic expertise, and scalable geospatial platforms.

Governed innovation through regulatory sandboxes

Recommendation 83 isn’t a throw-away recommendation. Sandboxes - designed with governance, testing protocols, and regulator collaboration are vital to de-risk digital experimentation and accelerate innovation adoption.

Programme assurance and delivery transparency

With billions of pounds allocated under AMP8, Recommendations 76 and 79 highlight the need for benefit tracking and delivery assurance. The solution is integrated portfolio governance platforms, not more spreadsheets - linking delivery, operations, and finance.

Turning Recommendation into outcomes

This isn’t about embedding more digital tools - it’s about creating the right conditions for those tools to drive meaningful outcomes and measurable benefits. To deliver impactful change based on the 88 recommendations water organisations need to consider:

• Clear data governance models for comparability and integrity
• Open standards and APIs to enable modular, interoperable systems
• Digital operating models drawing on cross-sector experience
• Investment in digital skills to support system adoption and evolution
• Processes for adaptive regulation and transparent oversight.

The task now is not to just comply with the 88 recommendations but to deliver the systemic enablers that make reform real.

At CGI, we bring deep, practical expertise to support the sector at a pivotal time. With decades of experience in highly regulated industries, we understand what it takes to build and measure benefit cases, integrate complex systems, uphold robust governance, and ensure security at scale. Our track record includes delivering national infrastructure platforms, shaping regulatory data frameworks, and enabling organisations to innovate responsibly - without compromising on oversight or trust.

Delivering on ambition: What’s next for the sector?

Formal responses from government are due later this year. In the meantime, regulators and companies must begin shaping delivery strategies, capability assessments, and transformation roadmaps.

The Commission’s report marks a pivotal moment for the sector. It provides a diagnosis but not a prescription.

Technology designed and delivered in context is how this reform will be realised.

For deeper insight on the technology implications of the Commission’s recommendations, or to collaborate on future delivery models, contact our water sector team.