As of yesterday, the Environment Agency can now impose unlimited financial penalties on companies who pollute the environment.

The previous £250,000 cap on Variable Monetary Penalties (VMPs) has now been scrapped and the range of offences they cover has been expanded, meaning the Environment Agency has more tools with which to hold the water industry, and others, to account.

The range of offences that can be punished with a VMP now include:

• Breach of permit conditions from sites that discharge into rivers and seas - for example from sewage treatment works and permitted storm overflows;
• Illegal discharges to water where there is no permit, such as in the event of agricultural pollution from slurry stores;
• Illegal waste offences, such as from illegal scrapyards or unpermitted waste management facilities;
• Permit breaches from manufacturing industries and power stations which contribute to air pollution.

The new unlimited penalties - a measure in the UK Government’s Plan for Water - form part of work to ensure there is more investment, stronger regulation and tougher enforcement across the water system.

The changes, which follow a consultation in Spring 2023, affect all firms that have environmental permits, including water and waste companies as well as the agricultural sector and process industries. Penalties issued will be proportionate to the size of the company and the nature of the offence, in line with Sentencing Council guidelines.

Environment Secretary Steve Barclay said:

“Polluters should be in no doubt that if they harm our precious habitats and waterways they will pay.

“By lifting the cap on these sanctions, we are simultaneously toughening our enforcement tools and expanding where regulators can use them. These changes will deliver a proportionate punishment for operators that breach their permits and cause pollution.

“Through the launch of the Water Restoration Fund, the money raised from penalties imposed on water companies will go towards restoring and protecting our waters. This is part of the increased investment, stronger regulation and tougher enforcement we are delivering through our Plan for Water.”

Environment Agency Executive Director John Leyland commented:

“These new powers will allow us to deliver more penalties and help us to continue to hold polluters, including water companies, to account.

“The threat of uncapped financial penalties should boost compliance with environmental laws – helping us provide stronger protection to the environment, communities and nature.”

As well as changes to the VMP system, the Government has recently taken other measures to hold polluters accountable for environmental damage. Ofwat has been given increased powers to ensure water company dividends are linked to environmental performance while the regulator has also tightened the rules on bonus payments. For 2022-23, no water company Chief Executives in England are paying a CEO bonus out of customer money.

The funds raised from water company penalties will be reinvested in a new Water Restoration Fund, designed to provide direct investment for projects that work to improve rivers, lakes and streams at a local level.