Water companies ‘significantly behind’ on AMP7 delivery

Environment Agency bosses have warned that water companies are at risk of missing legally binding environmental commitments.

The regulator’s chief executive Philip Duffy told the Environmental Audit Committee (EAC) that some water companies are in the “unprecedented situation” of being “significantly behind” on delivering work during this asset management period (AMP7).

Over the next decade to 2035, several critical deadlines for waterbodies including those laid out in the Water Framework Directive will pass.

Asked if he was confident those deadlines would be met, Duffy paused before saying: “Honestly, we have a small number of water companies now who are significantly behind on their AMP7 work. That is a pretty unprecedented situation for the Environment Agency to be in that they have not delivered what they said they would do in PR19.”

For the first three years of AMP7, 12 companies underspent their water enhancement allowances and nine underspent their wastewater enhancement allowances, according to Ofwat

Duffy said not delivering on AMP7 commitments left companies “at significant risk of missing the deadlines”, for which the Environment Agency would carry out enforcement action.

These include achieving good ecological status of waterways by 2027 and reducing abstraction levels by 2030.

The Water Framework Directive was agreed upon before the UK left the European Union. It requires participants to achieve good status in all bodies of surface water and groundwater by 2027.

Good status is comprised of four assessments: ecological status of surface waters, chemical status of surface waters, chemical status of groundwaters, and quantitative status of groundwaters.

Duffy said the Agency was working with the sector to understand what was required, and in what order, for water companies to meet those deadlines.

Although Duffy did not name and shame the underperformers, he pointed to the EPA scores published annually.

He said those who miss the 2027 targets will face enforcement action from the environmental regulator and added his concern that the 2030 abstraction targets “will be very challenging” to meet.

The Environment Agency grades the performance of water and sewerage companies in its annual Environmental Performance Assessment (EPA) scores. The maximum four-star score was only achieved by Severn Trent in 2023.

Anglian, Southern, South West, Thames and Wessex all scored two stars while Northumbrian, United Utilities and Yorkshire each earned three stars last year.

Duffy appeared before the parliamentary committee with Environment Agency chair Alan Lovell, who admitted the agency was not currently doing a good job.

They set out improvements the regulator is making to turnaround performance, including a heavy focus on permitting, inspection and enforcement activity relating to the water sector.