Following the introduction of the Water
(Special Measures) Act 2025, the Environment Agency is
now able to recover additional costs associated with regulating
the water industry. This includes the cost of existing and new
enforcement activities which were previously funded by government
Grant in Aid.
The proposals – set out in a consultation seeking
views from the industry, campaigners and members of the public –
will see a levy on water companies.
Alan Lovell, Chair of the Environment Agency,
said:
The Water (Special Measures) Act was a crucial step in making
sure water companies take full responsibility for their impact on
the environment.
The increased regulatory powers introduced by this legislation,
including cost recovery for our enforcement work, will allow us
to close the justice gap, deliver swifter enforcement action and
ultimately deter illegal activity.
Alongside these reforms, we are undertaking the biggest ever
transformation to the way we regulate the water industry. By
investing in people, training and digital assets, we are ensuring
water companies better meet the needs of both people and the
environment, now and in the future.
The consultation proposes a new levy to raise on certain water
discharge activities and is designed to recover costs associated
with the Environment Agency's enforcement work directly from
water companies. These cost recovery powers are set out under the
Water (Special Measures) Act and all activities will be in line
with the Environment Agency's enforcement
and sanctions policy.
The consultation will run until 26 May, and the new charging
scheme to be finalised and implemented this summer.
Water Minister said:
We promised that polluters would pay for the damage they cause to
our waterways.
That's why we're making sure water companies – not regulators –
bear the cost of enforcement action taken in response to their
failings.
Through the Water (Special Measures) Act water bosses could face
imprisonment for lawbreaking and regulators now have new powers
to ban undeserved bonuses and bring automatic and severe
penalties against polluters.
Today's consultation takes us closer to shaping a water sector
that delivers real and lasting improvements for customers and the
environment as part of our Plan for Change.
