Ofwat has today proposed that Thames, Yorkshire and Northumbrian will be fined a total of £168m for failing to manage their sewage treatment works and networks, as part of the first batch of outcomes from its biggest ever investigation.
These are the first three cases Ofwat has open as part of a wider investigation. Eight other water companies are still be investigated.
The penalties proposed will see Thames Water fined £104m, Yorkshire Water fined £47m and Northumbrian Water fined £17m.
The fines, which are now subject to consultation under the regulatory system, represent 9%, 7% and 5% of each company’s turnover, respectively. The maximum fine that Ofwat can impose is 10% of turnover.
The penalties relate to their management of wastewater treatment works and wider sewer networks including their operation of storm overflows. These are designed to release water in exceptional circumstances, when the sewerage system is at risk of being overwhelmed, such as during unusually heavy downpours or snowfall, to prevent sewage flooding into people’s homes.
Ofwat found that all three companies, to varying extents, 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 customers.
- Shown a strong correlation between high spill levels and operational issues at wastewater treatment sites, indicating that these companies are properly operating and maintaining their wastewater treatment works.
- Failed to upgrade assets, where necessary, to ensure they meet the changing needs of the 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.
Therefore, in addition to the proposed financial penalties, Ofwat is also consulting on proposed enforcement orders which will require each company to rectify the problems Ofwat has identified to ensure that they comply with their legal and regulatory obligations.
Companies will not be able to recover the money for any proposed penalties from customers and Ofwat will ensure that customers are not charged twice where additional maintenance is required, it said.
Ofwat chief executive David Black said: “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.
“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 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.”
