Thames Water, Yorkshire Water, and Northumbrian Water in the United Kingdom, are facing potential fines amounting to £168 million due to historic sewage spills, as proposed by the industry regulator, Ofwat.
This proposal, part of Ofwat’s most extensive investigation into water company performance, will undergo public consultation.
The announcement comes amidst increasing public discontent regarding the environmental and financial performance of some water companies.
In 2023, sewage spills into England’s rivers and seas more than doubled.
Ofwat’s investigation revealed that these companies failed to sufficiently invest in and maintain their networks, leading to frequent releases of raw sewage into the country’s waterways.
Ofwat’s Chief Executive, David Black, stated, “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.”
“Releasing raw sewage poses significant environmental risks and threatens human health for those swimming in contaminated waters,” Ofwat notified the companies of its provisional findings in December 2023, allowing them to provide further evidence.
On Tuesday, Ofwat proposed fines of £104 million for Thames Water, £47 million for Yorkshire Water, and £17 million for Northumbrian Water.
Ofwat has the authority to fine companies up to 10% of their annual sales, and the proposed fine for Thames Water, at 9% of sales, reflects the severity of the offences, as David Black told the BBC.
A spokesperson for Yorkshire Water responded, “We are disappointed with Ofwat’s response to their investigation into our wastewater treatment networks. Since the start of this process in November 2021, we have co-operated fully with the investigation and we will continue to seek clarity. We and our customers care deeply about river health and we want to provide reassurance that we have already taken considerable action to improve.”
Thames Water and Northumbrian Water have been contacted for comment by the BBC.
Ofwat continues to investigate eight other water and wastewater companies in England and Wales for similar issues, with further updates expected in the coming year.
Water companies have proposed raising customer bills by over 44% in the next five years to fund infrastructure improvements.
Thames Water has requested an increase of £191 over the next five years, but Ofwat has only agreed to £99.
Public frustration has grown over the perceived lack of investment in necessary upgrades from customer payments.
Environmental campaigners earlier this year called for a ban on executive bonuses and a review of shareholder payouts in cases of environmental damage.
The government is currently consulting on ensuring that funds designated for upgrades are not used for salaries or dividends.
Secretary of State for Environment, Food and Rural Affairs, Steve Reed, commented, “I welcome Ofwat’s action today. The unacceptable destruction of our waterways should never have been allowed – and it is right that those responsible for illegally polluting our rivers, lakes and seas face the consequences. This Government will fundamentally reform the water sector.”
The looming fines raise questions about some companies’ ability to fund infrastructure upgrades.
Thames Water, burdened with debts of £14.7 billion, recently announced it only had sufficient funds to operate until the end of May 2025 and faces potential credit rating downgrades.
When asked by the BBC’s Today programme about the consequences if companies could not afford the fines or necessary upgrades, David Black stated, “We have the power to impose these fines on companies and if they fail to do so then they will effectively be defaulting on their obligations. So I am sure we will collect these fines.”
