In an Expert Focus article for WaterBriefing, John Lillistone, Director of Market Development at Arqiva, discusses how the water sector can seize the opportunities presented by the Cunliffe Report.

John Liliistone: While we wait for Sir Jon Cunliffe’s full review, the interim report he shared in June already gives us a good sense of what’s coming, what needs to change, and how the water industry can move towards positive action.

At its heart, the review is about protecting the environment, safeguarding the UK’s water supply, and reconnecting the water industry with regulators and the public. Cunliffe is clear that the current setup isn’t working, and that both the industry and the way it’s regulated need to evolve.

For water companies and their partners, this could be a real turning point. Instead of focusing purely on ticking compliance boxes, there’s now a chance to step back, think long-term, and build greater resilience into systems and services. This will require a mindset shift across the industry – one that sees it encompass outcome-based delivery and smarter infrastructure that is set up to drive meaningful and lasting impact.

But how can you lay the groundwork for long-lasting impact, despite the period of uncertainty?

Understanding the Review

Despite being an interim report, Cunliffe’s review paints a clear picture. It echoes concerns we’ve heard before, especially around the short-term focus of economic regulation and the combative relationships that can result from that.

What’s new, though, is the direction it points us in. We’re heading towards a more open, transparent model where outcomes are independently assured, and both industry and regulators are expected to bring stronger technical expertise to the table. This is key to building a future that stands up to public and political scrutiny and earns back trust.

Don’t get left behind in data

Data is fuelling the technology-driven revolution in the water industry. While there have been repeated calls from regulators to adopt a digital first approach – and many have done this successfully – the task is now handling this huge influx of data from daily readings and turning it into something that’s actually useful.

If done well, data can help rebuild public confidence. It’s already playing a big role in reducing the time it takes to spot and fix leaks. But it can also open the door to more engaged, informed customers.

If people can see exactly how much water they’re using, what it’s costing them, and whether there’s a potential leak at home, they’re far more likely to feel part of the solution and not just passive users of a service.

Build smarter partnerships with outcomes-based contracts

The traditional models for selecting partners for the rollout of smart meters, networks and installations are fragmented. But both customers and regulators alike want assurances that the smart water meters that are in the ground are working and providing accurate readings.

That’s where outcomes-based contracting can provide real-tangible benefits. By moving contracting beyond the completion of individual tasks, and by consolidating responsibility with a primary contractor, this model puts the focus on results. It encourages contractors to think bigger and work more efficiently, so they can ultimately boost innovation.

It also helps spread risk in a more balanced way. The lead contractor takes on responsibility for assembling the right team, and everyone works together to meet agreed goals - sharing both the risks and the rewards.

Go beyond the meter

Smart meter rollouts have been an important step forward, but they’re just the beginning. As expectations grow around performance, transparency, and investment across both clean and wastewater systems, the pressure is mounting for water companies to go further and come up with smarter solutions.

That means looking beyond the meter and starting to embed advanced sensors throughout the network. These tools can make a real difference by supporting everything from chlorine level monitoring to managing sewer overflows and improving drainage and ecosystem health.

But this isn’t just about buying the latest tech. The real value comes from systems that are built for the long term, are reliable for data capture and provide both the strong connectivity and infrastructure that are needed to deliver consistent performance. That’s what will set companies apart as the full Cunliffe review takes shape.

Cunliffe’s interim report makes it clear that the water industry’s job isn’t just to deliver water. It’s to leave a positive, lasting mark on the environment while doing it.

That’s not going to happen by sticking to the same old approaches. But if water companies can step back, take a long-term view, and invest in the right partnerships and technologies, they can build a system that’s smarter and better for everyone. That means reducing leakage, improving customer engagement, and making meaningful strides toward a more sustainable future.