Crackdown on water firms sees millions invested into local action

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Steve Barclay MP. Picture by Simon Dawson / No 10 Downing Street.

“I know how important our precious waterways are to local communities and to nature, which is why we’re taking tough action to ensure our regulators are well-equipped to hold those who pollute them to account” – Environment Secretary Steve Barclay.

Up to £11 million in water company fines and penalties will be reinvested back into a new Water Restoration Fund (WRF), Environment Secretary Steve Barclay announced today (Tuesday 9th April). 

All water company environmental fines and penalties since April 2022 have been ringfenced to directly improve the water environment.

The Water Restoration Fund will offer grant funding on a competitive basis to support local groups, farmers and landowners and community-led schemes, bolstering their capacity and capabilities for on-the-ground projects to improve the water environment. This could include activities that improve biodiversity and community access to blue and green spaces in areas where water companies have been issued with fines or penalties. 

This delivers on the government’s long-term plan, set out in its Plan for Water, to clean up our waters and make polluters pay for the damage they cause to the environment.

The launch of the Fund follows significant action taken in recent months to hold water companies to account, including a ban on bonuses for water company executives where firms have committed serious criminal breaches, subject to Ofwat consultation, and plans to quadruple the Environment Agency’s regulatory capacity, enabling them to carry out 4,000 water company inspections by the end of this financial year.   

Funding for the Water Restoration Fund comes exclusively from water company fines and penalties. These penalties and fines are additional to any reparations that water companies make when they have breached environmental regulations. 

Environment Secretary Steve Barclay said:  

“I know how important our precious waterways are to local communities and to nature, which is why we’re taking tough action to ensure our regulators are well-equipped to hold those who pollute them to account. 

“Through the Water Restoration Fund, I will be making sure that money from fines and penalties – taken from water company profits only – is channelled directly back into our waterways. 

“Community-led projects are vital to improving and maintaining water quality across the country, and this fund will help build on that success.” 

Natural England’s chief executive Marian Spain said:

“Natural England welcomes the creation of Defra’s Water Restoration Fund, using the money from water company fines and penalties to improve water and wetlands for nature and people, and looks forward to supporting Defra to make good use of the funds now available.

“The fund is great opportunity for landowners, communities and nature bodies to help make a real difference to the condition of our Sites of Special Scientific Interest and to restore natural processes in catchments to provide the nature and health benefits that society needs from water.”

The fund will be open to a range of organisations in England, including farmers and landowners, eNGOs, Local Authorities, catchment partnerships, National Parks and National Landscapes.

The £11 million in fines and penalties collected will be allocated for water improvements in the water company areas on which they were accrued in: 

  • Anglian Water: £3,085,000  
  • South West Water: £2,150,000  
  • Thames Water: £3,334,000  
  • United Utilities: £800,000  
  • Yorkshire Water: £1,600,750  

Applicants will have an eight-week window to apply from today, with grant awards expected to be issued from late July. For further details, please refer to our application guidance.

Further improvements recently delivered to the water environment include: 

  • Requiring companies to monitor 100% of storm overflows in England – providing a complete picture of when and where sewage spills happen.    
  • Removing the cap on civil penalties for water companies and broadening their scope so swifter action can be taken against those who pollute our waterways.    
  • Requiring the largest infrastructure programme in water company history – £60 billion over 25 years – to revamp ageing assets and reduce the number of sewage spills by hundreds of thousands every year.     
  • Increasing protections for coastal and estuarine waters by expanding the Storm Overflow Discharge Reduction Plan, prioritising bathing waters, sites of special scientific interest and shellfish waters. 
  • Providing £10 million in support for farmers to store more water on their land through the Water Management Grants to support food production and improve water security.     
  • Speeding up the process of building key water supply infrastructure, including more reservoirs and water transfer schemes.

Source: Department for Environment, Food & Rural AffairsRobbie Moore MP, and The Rt Hon Steve Barclay MP

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