The government has today launched a consultation on proposals to introduce new financial penalties for environmental offences and bolstered powers for the Environment Agency to hold water companies to account.

The bolstered powers were created in the Water (Special Measures) Act 2025 (WSMA) but must be subject to consultation before implementation.

Announcing the proposals, the Department for Environment, Food & Rural Affairs said that currently, the Environment Agency (EA) struggles to impose financial penalties for frequent, minor and moderate offending – such as some breaches of a licence or a permit. This is because it needs to prove an offence to the same high legal standard used in criminal courts - making penalties too expensive and time-consuming to pursue for less serious offences.

For criminal proceedings the EA is required to prove that offences have been committed ‘beyond a reasonable doubt’ – the criminal standard of proof. The Agency currently has existing powers to impose unlimited penalties to the criminal standard of proof.

To allow minor to moderate offences to be enforced more quickly, cost effectively and proportionately, the government is proposing to use the new powers introduced by the WSMA to enable the EA to impose Variable Monetary Penalties where they are satisfied ‘on the balance of probabilities’ - the civil standard of proof- that an offence has been committed.

Under the changes being considered by the government to expand and strengthen the current range of financial penalties available to the Agency in a bid to clamp down on more offences, water companies who commit environmental offences could face quicker penalties of up to £500,000. 

Automatic penalties would cover specific breaches such as failure to report a significant pollution incident within four hours, failure to report Event Duration Monitoring data monthly, failure to return abstraction data within 28 days of a request, or the use of an emergency overflow more than three times in one year.

“I want to give the Environment Agency the teeth it needs to tackle all rule breaking"

Announcing the proposals, Secretary of State, Emma Reynolds, said:

”I share the public’s anger at the current state of our water system, and this government is taking decisive action.

“I want to give the Environment Agency the teeth it needs to tackle all rule breaking. With new, automatic and tougher penalties for water companies, there will be swift consequences for offences – including not treating sewage to the required standard and maintenance failures.

“We are delivering on our Plan for Change by pushing ahead with reforms to clean up our rivers, lakes and seas."

The government will now consult on the new proposals, including:

• Allowing the Environment Agency to use a lower civil standard of proof, instead of criminal, for minor to moderate environmental offences.
• Setting a cap at either £350,000 or £500,000 for penalties issued to the civil standard.
• Introducing new automatic penalties – like a speeding ticket – for specific and obvious breaches without the need for lengthy investigations.
• Setting a value of either £10,000, £15,000 or £20,000 for the new automatic penalty.
• Automatic penalty if a water company fails to comply with a new requirement to report EDM data from each storm or emergency overflow to the EA on a monthly basis
• Automatic penalty for failure to report a significant pollution incident within 4 hours of detection.
• Automatic penalty if a company breaches a requirement that emergency overflows must not discharge more than 3 times a year.
• Automatic penalty to be triggered if an Event Duration Monitoring device at a storm and emergency overflow operates for less than 90% of the calendar year.
• Standardising permit condition requirements for all storm overflows to require EDMs to be installed, maintained, repaired and replaced as needed.The frequency of monitoring will also be standardised to 2 minutes.

Modelling, based on water company performance in previous years, suggests the changes could cost the water sector between £50 million and £67 million annually. However, according to the government, the actual cost is likely to be much lower as the policy is designed to drive effective and lasting behaviour change.

The changes would sit alongside existing enforcement tools, including unlimited financial penalties - known as Variable Monetary Penalties - where offending is proved to a criminal standard. The option of prosecution would remain for the most serious offences.

The cost burden for water company penalties is borne by their shareholders and Ofwat prevents companies from passing these on to customer bills.

Commenting on the proposals, Richard Benwell, CEO of Wildlife and Countryside Link, said:

“Small penalties that companies can absorb as business costs won’t drive change. Fines must be large enough to deter non-compliance and prevent pollution from being treated as an acceptable cost of doing business. Where serious environmental harm occurs, robust enforcement must remain firmly on the table. It’s also vital that money from these fines is ringfenced for nature recovery through a Water Restoration Fund – the polluter should pay to repair the damage they cause.

“These reforms are a step in the right direction, but the Environment Agency must have the funding and staff to use its powers effectively. Fixing our broken water system depends on strong, well-resourced regulators able to hold companies to account and ensure the polluter truly pays.”

The consultation will run for 6 weeks – deadline to submit responses is 3 December 2025. Responses can either be made online, via email or post. 

Click here to access the consultation online

Click here to download the consultation document Consultation on strengthening penalties for water company offences October 2025