Ofwat has today announced a £62.8 million enforcement package following its finding that Anglian Water has breached its legal obligations in operating its wastewater treatment works and network.

Ofwat’s investigation found that Anglian Water has failed to operate, maintain and upgrade its wastewater assets adequately to ensure they could cope with the flows of sewage and wastewater coming to them. The company failed to have in place adequate processes and oversight by its senior management and Board to ensure its assets were performing adequately and that it was meeting the legal requirements expected of it.

The package has been proposed by Anglian Water in response to Ofwat’s industry-wide investigation into wastewater treatment works and networks and will be entirely funded by Anglian Water’s shareholders rather than customers.

Lynn Parker, Senior Director for Enforcement at Ofwat, said:

“Our investigation has found failures in how Anglian Water has operated and maintained its sewage works and networks, which has resulted in excessive spills from storm overflows. This is a serious breach and is unacceptable.

“We understand that the public wants to see transformative change. That is why we are prioritising this sector-wide investigation which is holding wastewater companies to account for identified failures. We are pleased Anglian Water has accepted that it got things wrong and is now focusing on putting that right and taking action to come back into compliance. We expect all companies to do the same so that customers can regain confidence in their water company and the critical service they provide.”

Anglian Water and its shareholders will fund the total £62.8 million enforcement package which includes:

• Creating a £5.8 million community fund that will support projects delivering environmental and social benefits for local communities, with a particular focus on restitution of the water environment.
• Investing £57 million in developing and delivering 'Excess Flow Management Plans', to remove, attenuate or optimise wastewater flows in at least eight high priority catchments in its region to provide local environmental improvements, as well as addressing more specific place-based challenges. This will include installing sustainable drainage solutions (SuDS) to combat drainage and flooding issues, upgrading community-owned assets that contribute to flooding, and other local initiatives.
• Accelerating planned investment or 2025-30 through its Storm Overflows Discharge Reduction Plan to reduce spills at high-risk sites with new storage, removing surface water and misconnections and optimising the existing network. This includes earlier delivery of 36 storm tanks, 45 screens and 42 other deliverables.

In addition, the company will develop and deliver a remediation and compliance plan to ensure that all its storm overflows are compliant with the legal requirements considered by the investigation.

“It will take time to upgrade the vast network of assets we manage"

Anglian Water has already taken some steps to restore its compliance and the performance of its wastewater assets. This includes a 2024 commitment from the company and shareholders to invest £100 million to improve its spills and pollutions performance.

.Mark Thurston, CEO for Anglian Water, commented:

“We understand the need to rebuild trust with customers and that aspects of our performance need to improve to do that. Reducing pollutions and spills is our number one operational focus, and we have both the investment and the partners in place to deliver on those promises as part of our £11bn business plan over the next five years. In the meantime, we have proposed this redress package, recognising the need to invest in the communities and environments most impacted.

“It will take time and investment to achieve a significant reduction in spills, but we are making good progress. By 2030 we have allocated a dedicated £1bn for measures such as storm tanks, upgraded monitoring, nature-based solutions like wetlands, and sustainable drainage solutions to halve the number of spills.

“Equally, it will take time to upgrade the vast network of assets we manage; we have hundreds of treatment works, more than 100,000 kilometres of pipes and sewers underground, many hundreds of water storage points and storm tanks – all of these need to be part of a significant capital programme to maintain and renew what is there. This is what will be set out in our plans - to ensure we can make the improvements that are best for the environment and delivers on our promises to customers.”

Had the enforcement package not been agreed, a penalty would have been applied where the money would have been returned to the Consolidated Fund operated by HM Treasury.  The £62.8 million enforcement package Ofwat has secured is greater than if a penalty had otherwise been imposed on the company (which would have been £57.1 million, 6.5% of Anglian Water’s annual turnover).

Instead, the money will remain in the water sector and be spent on making improvements to service for the benefit of Anglian Water customers and the local environment.

The announcement marks the fifth case in Ofwat’s largest and most complex set of investigations into all companies and their management of their wastewater treatment works. It follows the conclusion of cases against Yorkshire Water, Thames Water and Northumbrian Water earlier this year that resulted in enforcement action worth more than £160m. As well as Ofwat’s recent consultation on the proposal for South West Water to pay a £24m enforcement package.

The enforcement package will now be subject to consultation which will be open for the public and key stakeholders to offer any final comments before Ofwat’s final decision.  Click here to access the consultation online