EA: Polluting water companies ‘will not or cannot change’

The Environment Agency has expressed serious concerns about water companies’ willingness to improve their environmental performance.

The regulator’s annual Environmental performance assessment report concludes that “the majority of water companies are not meeting basic environmental requirements” and adds that some appear unable to change.

In particular, the agency raises concerns that the number of pollution incidents (from sewerage and water supply assets) worsened from 1,883 in 2021 to 2,026 last year.

Environment Agency chair Allan Lovell labels the rise in pollution incidents as “simply unacceptable” in the report’s foreword.

He adds: “2022 was another missed opportunity for the companies to demonstrate they can improve their performance. Even worse, the early unconfirmed data for 2023 suggests that there has been no improvement this year either. I do hope this changes soon.”

The report rates five water companies as requiring improvement (Anglian Water, Southern Water, South West Water, Thames Water and Wessex Water). Three water companies are rated good (Northumbrian Water, United Utilities and Yorkshire Water), with only one water company achieving the top mark of four stars (Severn Trent Water).

The report concludes: “We are concerned that some companies will not or cannot change. Anglian Water and Thames Water repeatedly dominate serious incident numbers.

“Southern Water and South West Water have been rated red for their high number of total incidents for far too many years.

“These water companies in particular need to make radical changes now, but all water companies have areas to improve.”

Lovell adds that while the results are disappointing there is also some cause for optimism.

“The disappointing results are surprising given that when I talk to the Chairs and CEOs of these companies, I get a real sense of their intent to do better. But why is this not happening yet? Primarily, I think, because of the time it takes for cultures to change in large organisations and because there are some deep-rooted problems which can only be solved by significant investment. Not just this year and next, but for some decades to come,” Lovell states in the report’s foreword.

“I am not universally gloomy though. Some companies are doing better and some metrics are improving. Credit to Severn Trent Water who retain a 4 star rating for the fourth year, and to United Utilities and Northumbrian Water who are not far behind. But all know they are at the top of a very poor league.”

Key stats from the report include:

• 2,026 incidents from sewerage and water supply assets, an increase from 1,883 in 2021 and 1,919 in 2020
• 44 serious pollution incidents – a reduction compared to 62 in 2021, 52 in 2019 and 56 in 2018, and the same as 44 in 2020
• Self-reporting of all pollution incidents by water companies was 82%, the best since the start of the EPA in 2011 – however this contrasts with only 48% of serious incidents being self-reported
• 99% of sewage treatment works and water treatment works were compliant with numeric permit conditions for discharging treated wastewater
• 5% of planned environmental improvement schemes were completed from the Water Industry National Environment Programme (WINEP)

The assessments have been released just hours after the government confirmed that the Environment Agency would be given new powers to hand out unlimited fines to polluting water companies.

It will apply to permit breaches for combined sewer overflows (CSOs) and hazardous waste disposal.

Previously the Environment Agency could only hand out fines up to £250,000 for offences.

Reaction

In response to the report, a Water UK spokesperson said: “Today’s results demonstrate the need to further accelerate improvements in environmental performance.”

“We have seen a reduction in the number of serious pollution incidents, companies have delivered virtually all environmental projects required by the regulator, and over 99% of sewage works now meet the rules in their legal permit. However, the performance of some companies, as they acknowledge, is not improving fast enough and pollution incidents remain too high.”

“The industry is strongly committed to accelerating the pace of improvement, including with a £10bn overhaul of our Victorian sewage system to transform our rivers and seas.”

Susan Davy, CEO of Pennon, also defended the work of South West Water, despite the firm getting the joint-lowest overall rating of all companies. She said: “South West Water has the second lowest number of absolute waste water pollution incidents across the sector, alongside top quartile compliance performance. I said we would improve and we have.”

Davy added: “The plan is working and we remain on track to becoming a four-star company by the end of 2024. “One pollution is one too many, and we continue to achieve significant reductions year on year.”

Lawrence Gosden, Southern Water’s CEO, added: “This has been a challenging year for our customers and our business. The sector is under intense scrutiny. We also face diverse and significant regional and industry-wide challenges of climate change, population growth and the need to upgrade a legacy network of pipes and pumping stations, treatment works and storm overflows to meet increasingly stringent regulatory standards and the expectations of our customers and wider.

“We understand and are responding to these challenges. Whilst we are making progress against the commitments outlined by our new majority shareholder in late 2021 and our April 2023 Turnaround Plan, we recognise the desire of all stakeholders for us to go faster. We are directing all our efforts into executing our plans, investing wisely, and employing cutting-edge technology in the right places to highlight risks and to enable us to respond more intelligently and proactively.”