Three water companies are facing a combined fine of £168m after a series of failings, including over sewage treatment. The proposals by regulator Ofwat include a penalty of £104m for Thames Water, £47m for Yorkshire Water, and £17m for Northumbrian Water.
The fines come after an Ofwat investigation found that the companies had “routinely released sewage into our rivers and seas, rather than ensuring that this only happens in exceptional circumstances as the law intends.” This practice not only harms the environment but also goes against the companies’ legal obligations.
Ofwat has stated that it will consult on the level of the fines before the companies are ordered to pay, and could potentially reach a settlement with them instead. According to Ofwat chief executive David Black, the severity of the failings warrants a significant penalty to hold the companies accountable and send a message that clean rivers and seas are a top priority.
Black stated, “These companies need to move at pace to put things right and meet their obligations to protect customers and the environment.” The regulator has the power to fine firms up to 10% of their turnover, and the proposed penalties are the equivalent of 9% of Thames Water’s turnover, 7% of Yorkshire Water’s, and 5% of Northumbrian Water’s.
The issue of pollution in the UK’s rivers and coastlines has been a growing concern in recent years. Data from the Department for Environment, Food & Rural Affairs showed that sewage was dumped into designated “safe to bathe in” areas an average of 86 times a day in 2023. Additionally, Environment Agency figures revealed that untreated sewage discharges doubled from 1.8 million hours in 2022 to a record 3.6 million in 2023.
The financial health and plans to increase bills of several water companies have also come under scrutiny. Thames Water, in particular, is facing major financial challenges, with credit ratings agency Moody’s recently downgrading its debt to “junk” status. However, Black stated that the regulator would not back down from ensuring companies comply with their obligations, regardless of their financial circumstances.
The proposed fines will not lead to higher bills for customers, as they will instead “sit with investors.” This announcement was welcomed by campaign groups, who stated that further action is still needed. Greenpeace UK’s Doug Parr said it was “good to see this rogue industry finally paying the price for years of pollution.”
Yorkshire Water expressed disappointment with the proposed fine and stated that they would continue to seek clarity over the matter. However, they also acknowledged their responsibility to protect the environment and outlined their efforts to reduce discharges from storm overflows.
Thames Water also stated that they take the matter seriously and have cooperated with Ofwat’s investigation. They have committed to improving river health and investing in this area.
Northumbrian Water, on the other hand, expressed “very disappointed” with the decision and does not recognize some of the standards of compliance that Ofwat is enforcing. They stated that these standards are inconsistent with those of the Environment Agency and the government and with Ofwat’s own practice in the past.
Environment Secretary Steve Reed welcomed Ofwat’s announcement and stated that the government is committed to fundamentally reforming the water sector. He also announced plans to outline further legislation to transform and reset the water industry and restore the health of rivers, lakes, and seas.
This announcement by Ofwat on Tuesday is thought to be a record combined fine for sewage failings. In 2019, Southern Water was ordered to pay a record £126m package of fines and customer rebates over similar issues.
