King Charles' speech to Parliament this morning says the new Government will introduce a Water (Special Measures) Bill which includes strengthening Ofwat’s powers to ban the payment of bonuses if environmental standards are not met and strengthening regulation to ensure water bosses face personal criminal liability for lawbreaking.

King Charles said in his speech:

“My Government recognises the need to improve water quality and a Bill will be introduced to strengthen the powers of the water regulator.”

A more detailed briefing from 10 Downing Streeet says the Water (Special Measures) Bill delivers on the Labour Party's manifesto commitment to put water companies under tough special measures by strengthening regulation and begin the work of cleaning up our rivers, lakes and seas.

As an immediate step, the new Government says it will strengthen regulation to reverse the tide on “the unacceptable destruction of our waterways”, ensuring water companies deliver for customers and the environment and attract private-sector investment to upgrade “our crumbling infrastructure.”

The briefing says that water companies are failing to deliver for their customers and the environment, and “the public have, rightly, had enough.”

The Water (Special Measures) Bill will:

• strengthen regulation to ensure water bosses face personal criminal liability for lawbreaking.
• give the water regulator new powers to ban the payment of bonuses if environmental standards are not met.
• boost accountability for water executives through a new ‘code of conduct’ for water companies, so customers can summon board members and hold executives to account.
• introduce new powers to bring automatic and severe fines.
• require water companies to install real-time monitors at every sewage outlet with data independently scrutinised by the water regulators.

The briefing says the new measures will strengthen the enforcement regime and make clear that the Government will not tolerate poor performance across the water sector.

The majority of the measures in the Bill will extend and apply to England and Wales.

Key facts referred to in the briefing include:

• In 2022/23, £9.7 million was paid out in bonuses to water and sewage company executives in England and Wales despite the poor performance in the sector, with nearly £4.2 million in fines issued as a result of prosecutions. Water company bosses should not be rewarded when the water environment is being illegally polluted with untreated sewage.
• It is clear, after years of failure, that we need stronger regulation. Between 2015 and 2021 the number of enforcement actions brought against companies by the Environment Agency (EA) reduced by 48 per cent; only 5 prosecutions have been brought against individuals within companies, 2 of which have been successfully appealed.
• There is a lack of public trust in the water industry. Only one-third of customers expressed trust in water companies’ ability to ‘prevent sewage from entering rivers and seas’ and only a quarter think ‘companies act in the interest of people and the environment’.
• Monitoring of storm overflows in England has increased to 100 per cent. However, there are still 7,000 permitted emergency overflows (i.e. non-storm overflows which can be used in extreme circumstances) in England that are not monitored.
• Recent assessments of the condition of our rivers, lakes and other surface waters show that over four in five are not in good ecological condition, or on a trajectory towards it.
• The total dividends paid to shareholders by water companies in England between April 2010 and April 2023 amounts to just under £21.2 billion.
• There were 464,056 storm overflow spills recorded in 2023, a record number and an increase of 54 per cent compared to the 301,091 spills in 2022.

The briefing says that change will take time and the Government will outline further legislation to fundamentally transform and reset the water industry and restore our rivers, lakes and seas to good health.

Commenting on the Government's plans for the Water (Special Measures) Bill announced today, David Black, Ofwat CEO said:

"We look forward to working with the Government as it aims to increase our powers to drive more responsible decision making in the Boardrooms of water companies, and support us in going further to protect and promote the interests of customers and the environment."