Ofwat has fined three water companies a total of £168m for failing to manage their wastewater treatment works and networks, as part of the first batch of outcomes from its biggest ever investigation.
The penalties will see Thames Water fined £104m – Yorkshire Water fined £47m – and Northumbrian Water fined £17m.
The penalties relate to the management of wastewater treatment works and wider sewer networks including their operation of storm overflows. These are designed to release water in exceptional circumstances, when the sewerage system is at risk of being overwhelmed, such as during unusually heavy downpours or snowfall, to prevent sewage flooding into people’s homes.
Secretary of State for Environment, Food and Rural Affairs, Steve Reed said, “I welcome Ofwat’s action today. The unacceptable destruction of our waterways should never have been allowed – and it is right that those responsible for illegally polluting our rivers, lakes and seas face the consequences.
“This government will fundamentally reform the water sector. We have announced our first steps to clean up the water industry in our Water (Special Measures) Bill, to cut sewage pollution, protect customers and attract investment to upgrade its crumbling infrastructure.
“We will outline further legislation to transform and reset our water industry and restore our rivers, lakes and seas to good health.”
Ofwat has found that all three companies have:
- Failed to ensure that discharges of untreated wastewater from storm overflows occur only in exceptional circumstances
- Shown a strong correlation between high spill levels and operational issues at wastewater treatment sites which points to these companies not having properly operated and maintained their wastewater treatment works
- Failed to upgrade assets
- Been slow to understand the scope of their obligations relating to limiting pollution from storm overflows and failed to ensure that they had in place the necessary information, processes and oversight to enable them to properly comply with those requirements
The scale of the breaches Ofwat has found, differs between each of the companies.
In addition to the proposed financial penalties, Ofwat is consulting on proposed enforcement orders which will require each company to rectify the problems Ofwat has identified to ensure they comply with their legal and regulatory obligations.
Companies will not be able to recover the money for any proposed penalties from customers and Ofwat will ensure that customers are not charged twice where additional maintenance is required.
Ofwat’s Chief Executive David Black said, “Ofwat has uncovered a catalogue of failure by Thames Water, Yorkshire Water and Northumbrian Water in how they ran their sewage works and this resulted in excessive spills from storm overflows. Our investigation has shown how they routinely released sewage into our rivers and seas, rather than ensuring that this only happens in exceptional circumstances as the law intends.
“The level of penalties we intend to impose signals both the severity of the failings and our determination to take action to ensure water companies do more to deliver cleaner rivers and seas.
“These companies need to move at pace to put things right and meet their obligations to protect customers and the environment. They also need to transform how they look after the environment and to focus on doing better in the future.
“Looking to the future we want transform companies’ performance under our new price control that starts in April next year, so we reduce spills from sewage overflows by 44 per cent by 2030 compared to 2021 levels.”
These proposed findings are the first three cases that Ofwat has open in its wider investigation to reach this stage. This investigation is a priority for Ofwat, and it will continue to work as quickly as possible on the eight further cases.
Tessa Wardley, Director of Communications & Advocacy at The Rivers Trust, said, “For too long, failure to invest in our vital water infrastructure has been unchecked and allowed to become business as usual, so we’re pleased to see that Ofwat have acted on the results of their investigation into water companies.
“The figures cited in today’s announcement reveal the systematic issues within the water industry that we have long suspected, and it seems highly likely that there is more to come when investigations into the other eight water companies is concluded.
“As environmental advocates, and as water company customers, we must always demand higher standards, there is much more to be done to recover our rivers, however, let’s hope these fines help to drive better environmental performance by water and sewerage companies in the future.”