Ofwat and government may have broken law over sewage spills

Ofwat and two government departments may have broken the law by allowing water companies to discharge untreated sewage into UK waterways more times than legally permitted.

Initial findings from an Office for Environmental Protection (OEP) investigation have identified possible failures to comply with environmental law by the Department for Environment, Food and Rural Affairs (Defra), the Environment Agency and Ofwat.

All three bodies have been issued with formal notices instructing them where the OEP believes there has been a breach of legislation in relation to the regulation of combined sewer overflows (CSOs).

The public authorities have two months to reply, after which point the OEP will propose remedial action or practical measures to address issues.

If the OEP deems it is appropriate to take legal proceedings to the High Court, then the three bodies could be issued with a statement of non-compliance (SONC) which would require the offending parties to “present a meaningful and substantive approach to tackling the findings”. The court may also grant any remedy available via a judicial review.

For the Environment Agency, the potential failures relate to the requirements of urban wastewater legislation and the Agency’s resulting role in devising guidance, setting permit conditions for CSOs, and the reviewing and enforcing of such conditions.

Ofwat’s alleged failures relate to the regulator’s interpretation of sewerage companies’ duties to effectually deal with sewage and Ofwat’s duty to make enforcement orders where companies fail to comply with such duties.

Meanwhile, potential failures at Defra relate to the requirements of urban wastewater legislation, water quality legislation, and the department’s duty to make enforcement orders where sewerage companies fail to comply with their own duties to effectually deal with sewage.

Helen Venn, the OEP’s chief regulatory officer, said that “there are no quick fixes” when it comes to improving the country’s water quality issues.

She added: “As a result of our investigations so far, we think there may have been misinterpretations of some key points of law. The core of the issue is that where we interpret the law to mean that untreated sewage discharges should generally be allowed only in exceptional circumstances, such as during unusually heavy rainfall, it appears that the public authorities may have interpreted the law differently, permitting such discharges to occur more often.

“This then has consequences for the regulatory activity that follows. The guidance provided by government to regulators, and the permitting regime they put in place for the water companies, possibly allow untreated sewage discharges to occur more regularly than intended by the law without risk of sanction. This is what has created the possible failures to comply that we have identified.”

The OEP launched its investigation into the regulation of CSOs by the three public authorities in June last year after receiving a complaint alleging failures to comply with legal duties.

While the OEP states that environmental law permits sewage discharges in “only exemptional circumstances”, latest annual data reveals that 301,091 monitored spill events were recorded by 10 wastewater companies in England and Wales during 2022.

A Defra spokesperson said that “the volume of sewage discharged is completely unacceptable”. However, the government department dismissed OEP’s claim that it amounted to a breach of law.

The spokesperson added: “While we do not agree with the OEP’s initial interpretations, which cover points of law spanning over two decades, we will continue to work constructively with the OEP on this issue.”

An Ofwat spokesperson added: “We welcome the OEP’s considerations, particularly on the clarity of responsibilities for the protection of the environment and we will work with them as their investigation moves forward.

“Our position at Ofwat remains clear, water companies’ performance on the environment is simply not good enough. […] We will keep pushing for the change and the improvements that the public rightly expects and where we can learn lessons or do things better, we will do so.”

Ofwat is currently carrying out the largest investigation it has ever undertaken into all wastewater companies, with six enforcement cases open against Anglian, Northumbrian, Thames, South West, Wessex and Yorkshire.

Millions of households across the country could also be in line for compensation under class action lawsuits being filed against half a dozen water companies on behalf of 20 million customers for alleged under-reporting of pollution incidents. If successful, water companies face paying out as much as £800 million in compensation.

The first claim has been lodged against Severn Trent with the Competition Appeal Tribunal. Further action is planned against Anglian, Northumbrian, Thames, United Utilities and Yorkshire.

Responding to the OEP update, Emma Clancy, chief executive of CCW, said: “We welcome these findings from the OEP and will be watching closely to see how all the parties respond. It comes at a time when fewer than half of people trust wastewater companies to protect the environment. The health of our rivers matters enormously to communities across the country. If we are going to restore people’s trust there has to be clarity over what is not only legal but also acceptable to customers who pay wastewater companies to be good stewards of the environment.”