Water companies that commit environmental offences could soon face quicker and tougher penalties of up to £500,000, under new measures being considered by the government.
Daniel Ware www.watermagazine.co.uk
A public consultation has been launched to expand and strengthen the financial penalties available to the Environment Agency (EA) in an effort to clamp down on pollution and other rule breaches across the water sector.
At present, the EA faces difficulties in imposing penalties for frequent, minor or moderate offences – such as some breaches of licences or permits – because it must meet the same high legal standard of proof required in criminal courts. Officials say this makes it too costly and time-consuming to pursue less serious cases.
Under the proposed changes, the standard of proof would be lowered to a civil level, making it easier and faster for the agency to hold companies to account.
The plans also include setting a maximum penalty of either £350,000 or £500,000 for civil-standard offences and introducing new automatic fines – similar to speeding tickets – for clear and straightforward breaches. These automatic penalties could be set at £10,000, £15,000 or £20,000.
Environment Secretary Emma Reynolds said the proposals form part of the government’s wider “Plan for Change” to clean up the country’s water systems.
“I share the public’s anger at the current state of our water system, and this government is taking decisive action,” she said. “With new, automatic and tougher penalties for water companies, there will be swift consequences for offences – including not treating sewage to the required standard and maintenance failures.”
The consultation builds on recent measures, including blocking bonuses for senior executives at polluting water companies and introducing prison sentences of up to two years for those who obstruct investigations.
Alan Lovell, Chair of the Environment Agency, welcomed the potential reforms, saying they would strengthen the regulator’s enforcement powers.
“These changes would be a welcome boost to our current enforcement powers and allow us to deliver swifter and more appropriate penalties,” he said. “Through a larger workforce and upgraded digital tools, we can deter poor performance and achieve a cleaner water environment for communities and nature.”
The powers were introduced in the Water (Special Measures) Act and must undergo consultation before being implemented. The reforms follow a recommendation from Sir Jon Cunliffe to expand the regulator’s toolkit to enable faster enforcement.
Government modelling suggests the proposals could cost the water sector between £50 million and £67 million a year, although the actual cost is expected to be lower as companies adjust their behaviour.
The new penalties would sit alongside existing enforcement tools, including unlimited fines – known as Variable Monetary Penalties – where offences are proven to a criminal standard. Prosecution would still be reserved for the most serious breaches.
The Department for Environment, Food and Rural Affairs (Defra) said that any financial penalties will be borne by company shareholders and cannot be passed on to customers through higher bills.
In addition to the tougher penalties, ministers say they are pursuing long-term reforms to the water industry, including £104 billion in private investment to upgrade infrastructure, build new reservoirs and establish a single regulator to oversee the sector.
The consultation closes on 3 December 2025 and can be accessed here:
https://consult.defra.gov.uk/water-sector-civil-penalties/strengthening-penalty-powers/

