Water companies should concentrate on reducing prices and stop focusing on improving the quality of water, a new report suggests.

The former head of Ofwat, the economic water and sewage regulator, suggested reforms are necessary to encourage more choice and trading in Britain’s water market to ensure they do not face significant water shortages in the future.

Sir Ian Byatt said regulators should look into negotiating settlements between water companies and customers to determine any price increases.

He said: “At a time when many families are struggling to get by, reducing the costs of basic necessities, like water, should be a priority. The increasing burden of regulatory policy on the water industry has contributed to rising prices and it is time for change.

“Water regulation needs to focus on driving down prices and ensuring we have enough supply. Sensible policies, such as encouraging more water trading between regions, would help to ensure Britain doesn’t face hosepipe bans in the future.”