Ofwat has reached the next stage of enforcement cases related to the regulator’s probe into non-permitted sewage discharges by UK water firms.
The watchdog, which regulates water firms in England and Wales, said in a statement it has notified Northumbrian Water, Thames Water and Yorkshire Water of its provisional findings.
The firms could be set for fines as the sector continues to face pressure over sewage dumping scandals in recent years, while receiving criticism for hiking bills at a time of bumper investor handouts.
Ofwat, which regulates water firms in England and Wales, said in a statement that it has notified Northumbrian Water, Thames Water and Yorkshire Water of its provisional findings
Water companies have been accused of releasing wastewater directly into rivers, watercourses and the sea during heavy rain or storms to stop pipes becoming overloaded.
The regulator, which will publish its proposed decision for public consultation in the first quarter of 2024, said: ‘If Ofwat ultimately makes a finding of breach sufficient to warrant a fine, as part of its enforcement powers, Ofwat can impose a financial penalty on companies, the value of which can be up to 10 per cent of relevant turnover.’
Responding to Ofwat’s statement, Thames Water said it was considering the initial findings in detail and might make representations to the regulator in due course.
Earlier this year, the regulator said that around 20 per cent of water running through pipes in England and Wales is currently being lost to leakage.
It has led to household water bills going up this year to pay for water firms’ £10billion investment in cutting sewage pollution.
The watchdog identified this an issue of growing importance amid population growth and climate change.
Ofwat judges the performance of water companies in England and Wales each year against the ‘stretching’ targets they set in 2019 for a five-year period until 2025.
Most water companies failed to meet key targets on reducing pollution, leakages and supply interruptions over the last financial year.
The watchdog announced in March that it would crack down on inappropriate dividends that do not match the company’s performance and proposed plans to ensure executive bonuses do not come out of customers’ pockets.
In November, Ofwat said executives of six water utilities across England and Wales refused a bonus this year after the regulator took measures to tighten returns that do not link to the company’s performance.
Since 2010, water companies have paid their shareholders over £20billion in dividends.
DIY INVESTING PLATFORMS
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
