This morning, Ofwat has published its
Performance Report on the water sector, announcing that water
companies will need to return £114m to customers for
underperformance.
Environment Secretary Thérèse Coffey:
Today’s Ofwat report is extremely disappointing. While I
acknowledge there is good work ongoing in some companies –
cleaning up waterways and investing in vital infrastructure –
there is simply not enough of it. The fact that not a single
water company is classified as ‘leading’ is unacceptable.
“We have written to the CEOs of every water company in the lowest
category of today’s report and my ministerial team and I will
meet them in person to scrutinise their improvement plans.
Billpayers should know we require the worst performers to return
money directly to customers through their bills.
The Government’s Plan for Water sets out how more investment,
stronger regulation and tougher enforcement will transform the
current system. I have been clear if these companies do not make
improvements across a range of different measures, we and our
regulators will not hesitate to use our powers to enforce it.
We are pushing water companies to go further and have changed the
rules on bonuses and dividends to ensure billpayers do not reward
pollution – or pay for what should already have been delivered.
Our water and sewerage systems are highly complex and under
increasing pressure – but that is no excuse. The public has made
it clear that a clean and plentiful water supply is a priority.
Government and regulators will be closely securitising upcoming
business plans to ensure they deliver the best possible deal for
customers, the environment and our future water needs.
Factsheet on government action in the water
industry
The Government’s Plan for
Water sets out how more investment, stronger regulation
and tougher enforcement is holding water companies to account and
ensuring we have a water sector fit for the future.
More investment
- As part of the Plan for Water, over £2.2 billion of new,
accelerated investment will be directed into vital infrastructure
to improve water quality and secure future supplies, with £1.7bn
of this being used to tackle storm overflows.
- All water companies have been asked to provide actions plans
for every storm overflow in England which we will publish
shortly.
- We have set stringent targets for water companies to reduce
storm overflows – driving the largest infrastructure programme in
water company history of £60 billion over 25 years. This includes
front-loading action in particularly important and sensitive
sites, including bathing waters.
- In a recent recent
High Court ruling on this plan, the Government won on
all claims considered by the High Court, meaning the plans were
considered lawful by the High Court. The ruling also outlined
that the Government’s plan goes ‘substantially’ further than
the law to drive a reduction in storm overflow discharges.
Stronger regulation
- We are driving up monitoring and transparency so the public
can see what is going on – we have increased the number of storm
overflows monitored across the network from 7% in 2010, to 91%
now, and with 100% expected by the end of the year.
- We are clear water companies must not profit from
environmental damage and we have given Ofwat increased powers
under the Environment Act 2021 to hold them account for poor
performance.
- On dividends: Using new powers granted to Ofwat by the
government, Ofwat is ensuring company dividends are linked to
environmental performance.
- On bonuses for water company executives: Ofwat has
outlined a new measure to ensure customers do not fund (via
water bills) executive bonus payments where they have not
been sufficiently earned through the company’s performance.
Tougher enforcement
- Since 2015, the Environment Agency has concluded 65
prosecutions, securing record fines of over £150 million against
water companies. The Environment Agency has also launched the
largest criminal investigation into unpermitted water company
sewage discharges ever at over 2,200 treatment works.
- We are also scrapping the cap on civil penalties and
significantly broadening their scope to target a much wider range
of offences. This is toughening our enforcement tools and
expanding where regulators can use them. This will deliver a
proportionate punishment for operators that breach their permits
and harm our rivers, seas and precious habitats.
- In 2022, 93% of bathing waters met the highest standards of
‘good’ or ‘excellent’, up from just 76% in 2010 and despite
stricter standards being introduced in 2015.
