According to the newly-released Regulating for people, the environment and growth, 2021 (RPEG) annual report by the Environment Agency, the environmental performance of the water companies in England was the worst seen for years.

Introducing the report, Environment Agency (EA) Chief Executive Sir James Bevan said:

“In 2021, the environmental performance of England’s water and sewerage companies was the worst we have seen for years. Serious pollution incidents increased to their highest total since 2013, while monitors on storm overflows – installed at our insistence – are highlighting that untreated sewage flows into our rivers all too frequently.

“We welcome the record £90 million fine imposed on Southern Water for widespread pollution last July – a clear signal that this is not what we or the public expect from companies whose job it is to treat sewage and protect the environment. For those who willingly disregard the law, we need to see strong deterrents or companies will simply consider this the cost of doing business.”

Fines totalling £105 million brought about by Environment Agency prosecutions in 2021

In 2021, courts fined water companies over £102 million for pollution offences following prosecutions by the EA, including a record £90 million fine for Southern Water. The case, the Agency’s largest criminal investigation to date, brought together pollution offences from 16 wastewater treatment works and one storm overflow into one large scale prosecution case.

Southern Water pleaded guilty to thousands of illegal discharges of sewage which polluted rivers and coastal waters in Kent, Hampshire and Sussex.

During in 2021 three other companies also received total fines of over £100,000:

• Thames Water - £10.3 million
• Severn Trent - £1.5 million
• Northumbrian Water - £540,000

For enforcement undertakings, where polluters and those who breach environmental requirements restore the environment themselves or fund other environmental projects or improvements in the local catchment or area, the following five water companies completed enforcement undertakings totalling over £100,000 in 2021.

• Yorkshire Water - £1.05 million
• Severn Trent - £564,509
• Wessex Water - £200,000
• Thames Water - £122,520
• Anglian Water - £100,000

In 2021, the Agency recorded over 370,000 sewage discharges from water company storm overflows, totalling over 2.6 million hours. Some 87% of storm overflows had at least one spill, with 5% spilling more than 100 times. The EA said the information is the result of its regulatory requirements forcing water companies to undertake more monitoring of discharges.

According to the report, while 79% of the elements it monitors in fresh water meet environmental quality standards, this equates to only 14% of rivers meeting good ecological status under the Water Environment (Water Framework Directive) Regulations. The main reasons for failure are attributed to farming and water company discharges.

Commenting on bathing water quality, the report says a record 99% of bathing waters in England met or exceeded the minimum quality standard in 2021, with over 70% achieving an excellent standard. This compares with 98.3% passing the required standards in 2019 and is the highest number since new standards were introduced in 2015.

The EA says that working with Ofwat and the Department for Environment, Food and Rural Affairs (Defra), the Agency’s regulation of water and sewage companies has resulted in:

• significant investment in water treatment infrastructure, including a programme to install event duration monitors on storm overflows from 2016 onwards
• significant improvements in bathing water quality with 99% meeting or exceeding the required standards in 2021
• reductions in organic pollution (biochemical oxygen demand), phosphorus and ammonia from monitored discharges, which leads to greater biodiversity in rivers

Abstraction – too much water being distracted which is damaging the environment

The report also flags up the EA’s ongoing work on abstraction - the modelling suggests that around 700 million litres of water per day comes from unsustainable abstractions, and that these will need replacing by other means between 2025 and 2050.

Of the water taken from freshwater sources, 51% is abstracted by water companies for public water supply and 38% is used by other industries. Current levels of abstraction are unsustainable in more than a quarter of groundwater bodies and up to a fifth of surface waters, reducing water levels and damaging wildlife.

Through changes to abstraction licences, the report says the EA has removed the risk of the potential abstraction of 1.7 trillion litres of water from the environment. During 2021, the checked 2,663 water abstraction licences and found 87% were compliant with the terms of their licence.

In 2021, the proposed move of the regulation of abstraction and impounding licensing into the EPR regime also went to public consultation. The proposal will make the charging framework fairer, work better for businesses and the environment, and be financially sustainable, the report says.

More work needed to reduce serious water pollution incidents

According to the EA, more work is still needed to reduce serious water pollution incidents.

The Agency’s Improving Water Company Performance Taskforce is currently looking at what the report describes as “numerous workstreams to improve all aspects of water company performance and to ensure we remain an effective regulator.” The EA’s goal is to gather intelligence on water company performance, to inform strategic planning and tactical delivery.

“This sector performance is much worse than in 2020, driven by both poorer performance and our higher expectations” the report says.

EA Chief says Agency welcomes Government exercise "to remove, revise or retain the body of EU-derived law currently in force"

The report was released as Sir James Bevan, chief executive of the Environment Agency, delivered a speech on the future of regulation to the Whitehall and Industry Group yesterday.

In a speech entitled Bregulation: rethinking regulation after Brexit , Sir James said:

“Good regulation is essential for most of the things we all want. The report we are launching today, Regulating for People, the Environment and Growth sets out what the EA does to support those things.

“But no regulatory system is perfect, including ours. Brexit is a massive opportunity to rethink how we do regulation in this country.

“The government has embarked on an exercise to remove, revise or retain the body of EU-derived law currently in force, much of which is the basis for most environmental regulation in this country. We welcome that. We think it is a great opportunity to deliver better regulation and better outcomes – for people, for business and for nature. “

“There will be examples of laws we find we don’t really need. There will be examples where changing the law will allow us to achieve better outcomes for the environment and nature and support economic growth. And there will be some laws that it will make eminent sense to keep.”

As an example of improving the regulatory system in a post-Brexit UK, Sir James said that in his personal view:

• the Floods Directive should be repealed
• the Water Framework Directive needed reform
• the Bathing Water Directive should be retained

Sir James said he would reform the Water Framework Directive (WFD) in order to drive better environmental outcomes - in order to enhance water quality and restore nature, not degrade them. He explained:

“ The WFD rightly sets high standards for water quality in rivers, lakes, estuaries and groundwater. But the way it requires us to categorise the status of those waters is complex, and can be misleading about the real state of those waters, both for better and for worse. And because the Directive stipulates that waters can only get “good” status if they tick all of several different boxes, it can force regulators to focus time and resources on indicators that may not make much difference to the actual water quality, taking focus away from things that would.”

Commenting on the Bathing Waters Directive, he said:

“I would keep the Bathing Waters Directive, which protects public health and the environment by keeping coastal waters free from pollution. It has done exactly that, driving the water companies, the regulators, the local authorities and local communities to make huge improvements in water quality at most of our beaches.”

The Environment Agency Chief concluded by telling his audience

“Strong regulation needs strong regulators. If regulators are going to do their jobs they need the right powers, the right resources, the right laws and the right support.

“Regulation doesn’t exist to protect us from ourselves. It exists to protect things we value – people, nature, our economy - that would not otherwise be protected. Let’s have no more regulation than we need, and let’s have the right kind. But when we need it, let’s make sure we have it.”

Click here to read the REPG 2021 report in full