The Environment Agency has today published its annual report on the environmental performance of England’s nine water and sewerage companies during 2023 – the data show that the majority of companies continue to underperform.

The report shows an improvement in star ratings under the Environmental Performance Assessment (EPA) - the EPA is the only independent comparison of environmental performance across the sector. However, the Agency says current performance remains well below expectations.

Tougher regulation is on the cards – in response to the report findings, the Environment Agency has set out further plans to transform its regulation of the water industry.

This year, five water companies are rated as requiring improvement (2 stars), one company is rated as good (3 stars) and three companies achieved 4 stars. 

Three companies achieved the maximum four EPA stars compared to one in 2022 – Severn Trent Water, Wessex Water and United Utilities, with Severn Trent achieving this for the fifth year running.

However, the Agency says the performance of most companies lags far behind. The EA is seeing polarised performance as shown by the number of serious pollution incidents. Over 90% were caused by four water companies – Anglian Water, Southern Water, Thames Water and Yorkshire Water.

• Severn Trent Water – 4 stars, the same as the previous year
• United Utilities – 4 stars, up from 3 stars
• Wessex Water – 4 stars, up from 2 stars
• Northumbrian Water – 3 stars, the same as the previous year
• Anglian Water – 2 stars, the same as the previous year
• Southern Water – 2 stars, the same as the previous year
• South West Water – 2 stars, the same as the previous year
• Thames Water – 2 stars, the same as the previous year
• Yorkshire Water –2 stars, down from 3 stars

The Agency is reviewing the EPA for the 2026 to 2030 data years – the EA intend to include a storm overflows metric to assess the number of EDM monitors reporting reliable data. The Agency’s ambition for 2031 onwards will be to broaden the metric to assess compliance and environmental impact.

The EA says that since 2011 EPA and wider reporting have provided an independent and objective comparison of water and sewerage companies’ performance. The EA constantly tighten EPA targets to improve standards - later this year, the Agency will further review the EPA to strengthen and broaden the metrics from 2026.

Introducing the report, Environment Agency Chair Alan Lovell said:

“With additional resources in place, a focus on transparent inspection and regulation, tightened EPA metrics and new legal powers, we are bringing stronger regulation to this sector in the coming year.

“For the nation to have cleaner rivers and seas, water companies must take responsibility to understand the root cause of their problems.

“It is promising to see some companies starting to accept their responsibilities, but it is evident that the pace of improvement continues to fall short.

“We frequently tighten standards to drive better performance and we have been clear that we expect all companies to achieve, and most critically sustain, better environmental performance.

“As part of this we are taking forward our biggest ever transformation in the way we regulate, recruiting up to 500 additional staff, increasing compliance checks and quadrupling the number of water company inspections by March next year. Through additional resources, tightened EPA metrics and new legal powers, we will be playing our part to ensure the industry steps up on the environment.”

This year’s report also found that:

• The number of serious pollution incidents increased from 44 in 2022 to 47 in 2023, remaining unacceptably high despite expectation to trend towards zero. Over 90% of these were caused by four companies (Anglian Water, Southern Water, Thames Water and Yorkshire Water), resulting in a polarised performance picture across the sector.
• Total pollution incidents from sewerage and water supply assets increased to 2,174 – the second consecutive annual increase and highest number recorded since 2019.
• Compliance with numeric permit conditions for discharging treated wastewater is not improving, with 45 sites found to be non-compliant.

The results make clear that companies need to go further and faster to improve their environmental performance.

The Environment Agency said it is challenging how things have been done in the past to address water industry performance through increasing its capacity and improving capability.

Having secured an additional £55 million of funding from government and water company permits, the Environment Agency are investing in a bigger specialised enforcement workforce and setting aside £15 million for new digital and monitoring systems to identify the root cause of issues.

In addition, the number of water company inspections will be quadrupled by the end of March 2025 to 4,000 and increased to 10,000 inspections the following year. The evidence gathered through the inspections will inform future performance assessments, investment plans and proactive enforcement.

Since 2015 the Environment Agency has secured 63 prosecutions against water companies, securing fines of over £151 million. In 2023 the Environment Agency concluded 4 prosecutions against 4 different water companies, with fines of more than £6.7 million.

Click here to read the full report online