Ministers plan to axe toothless water regulator Ofwat as serious sewage leaks rise 60% in a year while bills for homeowners soar

Daily Mail​

18-07-2025

Ministers are planning to axe the toothless water regulator Ofwat after a new report revealed the number of serious pollution incidents caused by water firms rose by 60 per cent in a year.
The Environment Agency revealed there were 2,801 sewage leaks, up from 2,174 in 2023, with just three firms behind 81 per cent of the most serious - Thames, Southern and Yorkshire.
The agency revealed consistently poor performance from all nine water and sewerage firms in the country despite its expectations for pollution incidents to decrease.
Meanwhile, just two companies – Northumbrian Water and Wessex Water – had no serious incidents last year, meeting the Environment Agency's expectations to see a trend to zero serious pollution incidents by 2025.
The data comes before the publication of a landmark review of the water industry on Monday, led by Sir John Cunliffe, who will outline his recommendations to the Government on tackling the sector's environmental and financial performance.
It also follows a report released by the Public Accounts Committee earlier on Friday, in which the cross-bench group of MPs called the level of pollution 'woeful' and recommended an overhaul of the regulation system.
Downing Street said the Government will wait for the final report when asked if there were plans to scrap Ofwat.
A No 10 spokesman said: 'We are waiting for Sir Jon Cunliffe's final report next week – you can expect us to set out our response after that on what more we will do to turn the sector around.'
Liberal Democrat environment spokesman Tim Farron said: 'if the Government do not commit to this, it would be a dereliction of their duty and a betrayal of millions of customers across the country.
'But the Government must not stop here, and we will continue to hold them accountable. Britain now needs a new, effective regulator, to stop the sewage scandal once and for all.'
Environment Secretary Steve Reed called the figures 'disgraceful' and a 'stark reminder' of how underinvestment and weak regulation have led to sewage polluting England's waterways.
'In just one year, this new Government has banned unfair bonuses for polluting water bosses, brought in jail sentences for pollution, and secured £104 billion to upgrade crumbling sewage pipes – one of the biggest infrastructure investments in history,' he said.
'Next week the Independent Water Commission will recommend changes to strengthen the rules so we can clean up our rivers, lakes and seas for good.'
Every year the Environment Agency records the number of times pollution, including untreated sewage, is released into waterways from water company infrastructure such as pumping stations, pipes and treatment works.
The figures, released on Friday, show companies recorded a total of 2,801 incidents, up from 2,174 in 2023.
The regulator assesses these incidents into categories, with category 1 (major) and category 2 (significant) considered the most serious in terms of their impact on the environment, such as damage to ecosystems, the loss of wildlife and harm to human health.
Last year, 75 category 1 and 2 incidents were recorded, up from 47 the previous year - Thames Water had 33, Southern Water 15 and Yorkshire Water 13.
The Environment Agency said it is clear some companies are failing to meet the targets it has set on pollution.
It attributed the rise in incidents last year to persistent underinvestment in new infrastructure, poor asset maintenance, and reduced resilience because of the impacts of climate change.
But it is understood the agency is still investigating incidents and their causes more closely to understand the major increase from 2023, particularly at Thames, which saw serious incidents double from 14 to 33.
An increasing trend in pollution spills from pipes carrying wastewater uphill emerged last year, accounting for 20 per cent of the serious incidents, the watchdog said, adding these affected some protected waters for wildlife and swimming.
While water companies report many of the incidents to the Environment Agency themselves, the regulator also carried out more inspections of firms last financial year, reaching more than 4,000.
This means it also discovered more non-compliance from firms, with 24 per cent of sites breaching their permits.
Alan Lovell, chairman of the Environment Agency, said: 'This report demonstrates continued systemic failure by some companies to meet their environmental targets.
'The water industry must act urgently to prevent pollution from occurring and to respond rapidly when it does.
'We have made significant changes to tighten our regulation of the water industry and ensure companies are held to account. With a dedicated larger workforce and increased funding, our officers are uncovering and acting on failures to comply with environmental law.'
Under the Water (Special Measures) Act introduced by the Government last year, the watchdog will have greater powers to take swift action against polluting companies.
To boost funding for water regulation, the Environment Agency is also consulting on a new levy on the water sector to recover the cost of enforcement activities, while the Environment Department (Defra) last week confirmed a 64 per cent increase in its funding from 2023/24.
A Water UK spokesperson said: 'While there have been some improvements, it is clear that the performance of some companies is not good enough.
'This is finally being put right, with a record £104 billion investment over the next five years to secure our water supplies, support economic growth and end sewage entering our rivers and seas.
'However, fundamental change to regulation is also needed. We hope that the recommendations of the Independent Water Commission next week will ensure the sector continues to get the investment it needs to drive down pollution incidents.'