The Department for Environment, Food & Rural Affairs (DEFRA) has announced the introduction of a landmark piece of legislation aimed at cracking down on pollution by water companies. The Water (Special Measures) Bill, unveiled by Environment Secretary Steve Reed, represents the most significant increase in regulatory enforcement powers in over a decade. The Bill is part of a larger effort to transform the water sector, addressing public outrage over the ongoing pollution of Britain’s rivers, lakes, and seas.

Tougher Penalties and Enforcement Powers

At the heart of the Bill are new measures to hold water companies and their executives directly accountable for environmental violations. Under the new legislation:

• Water company executives could face criminal charges if they obstruct investigations or fail to cooperate with regulators like the Environment Agency and the Drinking Water Inspectorate. In serious cases, executives may be subject to imprisonment, a significant escalation from the current penalties, which are largely limited to fines.
• Bonuses and performance-related pay will be banned for executives who fail to meet rigorous standards for environmental protection, consumer service, and financial resilience. Since 2020, water company executives have paid themselves over £41 million in bonuses, despite overseeing frequent environmental failures. The Bill empowers the regulator Ofwat to prohibit these payments unless high standards are met.

Speeding Up Enforcement and Accountability

Another major reform introduced by the Bill is the imposition of automatic fines for water companies found guilty of offences such as pollution, failure to report incidents, or withholding information from regulators. Currently, regulators are forced to conduct lengthy investigations before issuing penalties, a process that has been criticized for being inefficient and ineffective for more minor offences. By lowering the standard of proof required for penalties and enabling quicker fines, the government aims to improve regulatory response times and ensure offenders are held accountable.

The Bill also includes new rules requiring real-time monitoring and reporting of emergency sewage overflows. Water companies will be mandated to publish data within an hour of any spill, increasing transparency for both the public and regulators. This measure ensures that any discharge is immediately known and can be addressed more swiftly.

Holding the Water Sector to Account

In a speech, Secretary of State Steve Reed highlighted the urgent need to address the widespread pollution that has plagued the UK’s waterways. He emphasised that years of neglect have left the country’s rivers, lakes, and seas in an unacceptable state. Reed said, “Under this Government, water executives will no longer line their own pockets whilst pumping out this filth. If they refuse to comply, they could end up in the dock and face prison time.”

The Bill is part of a broader three-stage plan by the Government to overhaul the water sector:

1. Reset: Within days of taking office, the Environment Secretary secured agreements to ensure that funding for infrastructure upgrades would be ring-fenced for projects benefiting customers and the environment. Money saved from investments must be returned to customers, not used for executive bonuses or salary increases.
2. Special Measures: The Water (Special Measures) Bill is the first step in giving regulators more teeth to enforce compliance and punish wrongdoing. This initial legislation will drive improvements in the water sector's culture and performance.
3. Future Legislation: The Government plans to introduce further reforms to fundamentally transform how the water sector operates. This will focus on tackling pollution, ensuring a resilient water supply, and boosting investment in infrastructure upgrades.

Strengthening Oversight and Monitoring

The Bill also introduces new monitoring requirements for every sewage outlet across England, with water companies required to publish real-time data on sewage spills. This unprecedented level of transparency will make it easier for regulators and the public to hold water companies accountable. Additionally, water companies will now be required to produce Pollution Incident Reduction Plans, which will outline steps they are taking to prevent pollution incidents and improve environmental performance.

The Water (Special Measures) Bill is a critical step towards cleaning up the UK’s waterways and holding water companies accountable for environmental harm. With tougher penalties, automatic fines, and greater transparency, the Government hopes to drive real change in the water sector.

As Secretary Reed noted, “This Bill is a major step forward in our wider reform to fix the broken water system. We will outline further legislation to fundamentally transform how the water industry is run and speed up the delivery of upgrades to our sewage infrastructure to clean up our waterways for good.”

For more details, you can read the full set of measures here.