UK regulator proposes huge sewage spillage fines

UK regulator proposes major fines for three water utilities following its biggest ever investigation into sewage spills.

Failure to manage wastewater works and networks

The penalties relate to the utilities’ management of wastewater treatment works and wider sewer networks, including the operation of storm overflows designed to release water in exceptional circumstances, such as during periods of unusually heavy rain or snowfall, to prevent sewage flooding into people’s homes.

In announcing a total of €196 million fines, Ofwat announced that each of the utilities had:

• 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.

According to Ofwat’s investigations:

• Thames Water had 67 per cent of its wastewater treatment works with FFT (full to flow treatment) permits found to have capacity and operational issues. 16 per cent of its storm overflows associated with its wastewater treatment works were found to be in breach.
• Yorkshire Water had 16 per cent of its wastewater treatment works with FFT permits found to have capacity or operational problems. 45 per cent of its storm overflows associated with its wastewater treatment works were found to be in breach.
• Northumbrian Water had 3 per cent of its wastewater treatment works with FFT permits found to have capacity or operational problems. 9 per cent of its storm overflows associated with its wastewater treatment works were found to be in breach.

Financial penalties

The penalties reflect both the scale of the breaches by each company and Ofwat’s ability to impose penalties of up to 10 per cent of relevant turnover: Thames Water €121.4 million (9 per cent of turnover); Yorkshire Water €54.9 million (7 per cent of turnover); and Northumbrian Water €19.8 million (5 per cent of turnover).
Ofwat is also consulting on proposed enforcement orders, which will require each company to rectify the problems to ensure they comply with their legal and regulatory obligations.

The proposals also state that the customers must not be forced to pay the penalties through increased bills, nor will the utilities be able to charge customers where additional maintenance is required.

When announcing the proposals, Ofwat’s chief executive, David Black, told media: “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.”

His statement went on to say that the investigation had revealed routine releases of sewage into rivers and seas. 

“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,” he added. “These companies need to move at a pace to put things right and meet their obligations to protect customers and the environment.”

Ofwat wants each company to focus on doing better in the future and plans to transform performance under its price control due to start in April 2025.

How have the utilities reacted to the proposals?

A Yorkshire Water spokesperson told Aquatech Online that the company took its responsibility to protect the environment very seriously. “Last year, we apologised for not acting quickly enough and announced our €210 million programme to reduce discharges from our storm overflows before April 2025.”

They added: “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 cooperated fully with the investigation, and we will continue to seek clarity on their draft penalty and enforcement notice.”

The spokesperson said that the company will be responding to the notice by 10 September and ensured customers that it had already taken 'considerable action to improve'. 

“For the past two years we have been industry leading for our wastewater treatment works compliance, we have more robust processes and procedures in place, and we have finished work at 10 storm overflows with 44 on site, and 66 due to start soon as part of our £180m investment programme.”

Yorkshire Water’s business plan for 2025-2030, which is currently being reviewed by Ofwat, proposes the company’s largest environmental investment, amounting to €9.1 billion.

A spokesperson for Northumbrian Water told Aquatech Online that the company was ‘very disappointed’ by Ofwat’s decision, stating that it did not recognise ‘some of the standards of compliance that Ofwat is enforcing’. 

“These are a departure from its previous practice and appear inconsistent with those of the Environment Agency and the government and with Ofwat’s own practice in the past.  We’re working really hard to continue to deliver for customers and the environment, and will continue to comply with and exceed Government regulations.”