REGULATORS have fuelled soaring water bills by not encouraging private companies to spend “what they need to deliver the performance expected,” a damning public spending watchdog report concluded today.

The National Audit Office (NAO) highlighted “inconsistent responsibilities” and gaps in oversight within the Department for Environment, Food and Rural Affairs (Defra) and the sector’s regulators.

The watchdog examined the effectiveness of sector regulators — Ofwat, the Environment Agency, and the Drinking Water Inspectorate — as well as Defra, which sets policies for the sector in England.