Trio of water companies face £168m penalty for wastewater and sewage failures

Ofwat has proposed that three water companies will be fined a total of £168m for failing to manage their sewage treatment works and sewerage networks appropriately.

In what are the first three cases to be brought following a joint Ofwat and Environment Agency investigation into all 11 water and wastewater companies in England and Wales, the non-ministerial government department has proposed that Thames Water should be fined the largest share of the £168m penalty, landing a £104m fine. The remainder of the total fine will be split between Yorkshire Water (£47m) and Northumbrian Water (£17m).

In its announcement on Tuesday this week (6 August), Ofwat explained that the penalities it has proposed relate to failures the three companies made in the management of wastewater treatment works and wider sewer networks.

The failures found in the investigation that relate to the wider sewer networks include how the three companies operated storm overflows. These are designed to release water in exceptional circumstances – when the sewerage system is at risk of being overwhelmed – to prevent sewage flooding into people’s homes. Typically, storm overflows are operated when there are unusually heavy downpours or snowfall.

Ofwat’s investigation concluded that all three companies facing fines have:

• Failed to ensure that discharges of untreated wastewater from storm overflows occur only in exceptional circumstances which has resulted in harm to the environment and their customers.
• 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, where necessary, to ensure they meet the changing needs of the local area they serve.
• 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 difference in the sizes of the fines proposed reflects the scale of the breaches Ofwat has found (see box).

In addition to the proposed financial penalties, Ofwat is also consulting on proposed enforcement orders. These will require each company to rectify the problems identified to ensure they comply with their legal and regulatory obligations.

None of the companies will be able to recover the money for any proposed penalties from customers and Ofwat says it will ensure that customers are not charged twice where additional maintenance is required.

In each individual case, Ofwat’s proposed findings and enforcement action are subject to public consultation until 10 September. The Water Services Regulation Authority will then consider the consultation responses before making its final decision.

“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,” said Ofwat’s Chief Executive David Black.

“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 to transform companies’ performance under our new price control that starts in April next year, so we reduce spills from sewage overflows by 44% by 2030 compared to 2021 levels.”

Scale of breaches

Thames Water had 67% of its wastewater treatment works with flow to full treatment (FFT) permits found to have capacity and operational issues; 16% of its storm overflows associated with its wastewater treatment works were found to be in breach.

For more information about its enforcement case visit: https://www.ofwat.gov.uk/enforcement-case-in-thames-waters-management-of-its-sewage-treatment-works-and-sewerage-networks/

Yorkshire Water had 16% of its wastewater treatment works with FFT permits found to have capacity or operational problems; 45% of its storm overflows associated with its wastewater treatment works were found to be in breach.

For more information about its enforcement case visit: https://www.ofwat.gov.uk/enforcement-case-in-yorkshire-waters-management-of-its-sewage-treatment-works-and-sewerage-networks/

Northumbrian Water had 3% of its wastewater treatment works with FFT permits found to have capacity or operational problems; 9% of its storm overflows associated with its wastewater treatment works were found to be in breach.

For more information about its enforcement case visit: https://www.ofwat.gov.uk/enforcement-case-in-northumbrian-waters-management-of-its-sewage-treatment-works-and-sewerage-networks/

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