All water firms in England and Wales under investigation over sewage spills

All 11 water firms in England and Wales are under scrutiny by Ofwat as part of its major investigation into whether their sewage treatment works are polluting the environment.

The water regulator said it showed “how concerned we are about the sector’s environmental performance”.

James Wallace, CEO of River Action, said: “This is yet more evidence pointing to the appalling environmental track record of the UK’s water companies that have caused irreparable harm to our rivers and the failure of our regulators to enforce the law.

“After two years investigating six other water companies, we still await the verdict. We encourage the new Environment Secretary to act quickly and decisively while we watch the investigations closely.

"Whenever a water company is found guilty of environmental damage to our rivers, we need the punishment to fit the crime. Penalties must incentivise convicted polluters to upgrade their leaking infrastructure, rather than absorb fines as a cost of business as usual.”

Ofwat announced it had served formal enforcement notices on the four remaining utilities firms – Dwr Cymru Welsh Water, Hafren Dyfrdwy, Severn Trent and United Utilities.

It means it has gathered evidence and found the firms may have breached their obligations to protect the environment, which could lead to fines.

Ofwat opened a major investigation in November 2021 into the companies’ sewage treatment works.

It has handed fines amounting to more than £300 million in recent years to the companies it found to have breached their legal obligations.

The regulator has already taken out enforcement cases against Anglian Water, Northumbrian Water, South West Water, Thames Water, Wessex Water and Yorkshire Water, with extensive investigations ongoing.

It is also still monitoring Southern Water following a previous enforcement case in 2019.

The chief executive of that firm received a £183,000 bonus despite submitting a business plan which has been criticised by the industry regulator and attempting to raise bills more than any other English water company.

Lawrence Gosden received the bonus as part of a £764,000 pay package, up from £428,000 a year earlier, according to the company’s annual report.

Southern Water, which serves 2.5 million customers across south-east England, had proposed to raise water bills by 73% to £727 under its five-year business plan to 2030.

In response to Gosden’s bonus, the former Undertones singer turned water campaigner

Feargal Sharkey said: “See this is how it works. Publish an ‘inadequate’ business plan, persuade the regulator to allow you to increase customers’ bills by 60% over the next 5 years and you get a £764,000 salary including a £183,000 bonus. ‘Trebles all round.’”

The report showed the water firm's finance chief Stuart Ledger received £610,000 – including a £128,000 bonus – up from the £170,000 package he received the previous year, when he joined shortly before the end of the financial year.

Southern Water said Gosden and Ledger had hit targets for improving water quality, reducing pollution and cutting customer complaints.

However, they missed goals for leakage, sewer flooding, customer experience and cash management.

“This bonus will not be paid for from customers’ bills and will be borne by shareholders,” the company said.