News
£100m In Water Company Fines Invested Into Local Projects
More than £100 million in fines and penalties handed down to water companies since October 2023 and the government is now set to invest this cash into local community projects around the UK to clean up rivers, lakes and seas, addressing pollution and improving water quality.
Since the Labour government came into power, a record 81 criminal investigations have been launched into water supplier conduct, including the likes of environmental permit breaches that involve the release of excessive pollution into waterways (a criminal offence).
Fines can be issued and water bosses criminally prosecuted in the most serious of cases, such as illegal sewage spills.
In May, it was announced that the number of inspections carried out by authorities into sewage pollution climbed by almost 400 per cent since July 2024. Off the back of this, it’s possible that water executives could be jailed for five years and the suppliers themselves fined hundreds of millions of pounds.
In fact, struggling supplier Thames Water has just been fined almost £123 million for breaches of the rules relating to wastewater operations and dividend payments.
During an investigation, it was found that the majority of the firm’s wastewater treatment works had storm overflows that regularly made spills into the environment, with over 70 per cent in 2021 spilling on 20 or more occasions.
It was concluded that Thames Water failed to implement appropriate and robust wastewater management processes and controls to ensure that its wastewater treatment services were legally compliant.
As well as increasing the amount potentially payable in fines and jail time for those found to be operating outside the law, the government has also launched an independent review into the water sector regulatory system to protect the natural environment and deliver a fair deal for both customers and investors.
Steve Reed, environment secretary, said: “We inherited a broken water system with record levels of sewage being pumped into waters. But the era of profiting from failure is over.
“A record 81 criminal investigations have been launched into water companies under this government and Ofwat recently announced the largest fine ever handed to a water company in history. This government will invest money collected through fines into local projects to clean up our rivers, lakes and seas for good.”
The state of the water environment
Official figures currently show that just 16 per cent of assessed surface waters are classified as having good ecological status.
Some 14 per cent of rivers and 14 per cent of lakes are considered to be in good health, while 45 per cent of assessed coastal waters are classified as such. As for groundwater sources, in terms of quantity 73 per cent are considered to be good, while in terms of quality 45 per cent are currently classified as good.
Pollution is one of the biggest issues facing the UK’s water resources, with water suppliers one of the biggest culprits in this regard. Research shows that untreated sewage was discharged by firms around England into waterways for 3.614 million hours in 2024, up from the 3.606 million hours recorded in 2023.
One of the main reasons for this increased use of sewage overflows and for the increased duration of spillages – according to the Centre for Environmental Policy at Imperial College London – is chronic undercapacity of wastewater systems and the fact that treatment plants now have to deal with far higher water volumes than they were designed to cope with.
It is down to water companies to maintain their infrastructure and carry out necessary upgrades to ensure that they can handle additional pressure, but it seems that investment in this regard isn’t keeping up with the rise in demand or asset deterioration over time.
The Water (Special Measures) Act
In February of this year, the Water (Special Measures) Act received Royal Assent, strengthening water industry regulatory powers to ensure that polluters and those obstructing investigations are held properly to account in the form of fines and potential jail time.
The aim is to restore public trust in the sector and address illegal sewage spills, while addressing the fact that executive bosses continue to receive bonus-related pay despite poor performance.
This will be achieved through automatic and severe penalties for wrongdoing, criminal charges against persistent law breakers, blocking of bonuses for executives that pollute waterways and monitoring of every sewage outlet in the country.