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Water company fines to be channelled into environmental improvements

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Money from fines will be ring-fenced for work to improve water quality

Money from fines handed out to water companies that pollute our rivers and seas will be re-invested in schemes that benefit our natural environment, under new government plans.

Water companies were handed a record amount in fines for pollution incidents last year as part of ongoing action to hold rule-breakers to account.

Since 2015, the Environment Agency has concluded 56 prosecutions against water and sewerage companies, securing fines of over £141m.

At present, money from fines imposed by Ofwat and those arising from Environment Agency prosecutions is returned to the Treasury. Under the new plans, ringfenced funds will go to Defra and will be invested directly back into environmental and water quality improvement projects.

This could include initiatives to restore our water environments by creating wetlands, re-vegetating river banks and reconnecting meanders to the main channel of rivers.

Water Minister Rebecca Pow said:

“The volume of sewage being discharged into our waters is unacceptable, and can cause significant harm to our wildlife and sensitive habitats .

“It is right that water companies are made to pay when they break the rules, but it is also right that this money is then channelled back into improving water quality.

“Water company fines reached a record level last year, and moving forward these plans will significantly increase funding that will be used to recover, protect and enhance our natural environment.

“This is on top of the £56 billion investment we’re requiring water companies to invest in improving our water infrastructure, as well as holding them to account through tough new targets.”

Chancellor of the Exchequer, Jeremy Hunt said:

“These fines hold rule-breaking companies to account and mean record investment in our waterways.

“It comes on top of our requirement for water companies to invest in the natural environment – raising the largest ever environmental infrastructure investment of £56 billion over 25 years.”

To crack down on water pollution, government has boosted funding for the Environment Agency, with £2.2 million per year specifically for water company enforcement activity, including at least 4,000 farm visits per year and 500 sewerage inspections.

Where water and sewerage companies are found to be breaking the law, they will face substantial penalties.

This can include the Environment Agency imposing civil sanctions or pursuing criminal prosecutions with the courts, for which there can be unlimited fines, and in some cases prosecution of CEOs and company directors where there is evidence against those individuals and where it is in the public interest to prosecute.

Earlier this year, government announced plans to expand the use of, and raise the cap on, the civil Variable Monetary Payments that the Environment Agency can issue, meaning sanctions can be imposed more often without lengthy and costly court cases.

Ofwat also has the power to issue fines up to 10% of a company’s turnover for the affected business and order companies to take the action necessary to return to compliance where they are in breach.

The EA and Ofwat are currently carrying out the largest criminal and civil investigations into water company sewage discharges ever, at over 2200 treatment works, as a result of increased monitoring.

Earlier this year the government published its Storm Overflows Discharge Reduction Plan, which brought in strict targets on sewage pollution and will require water companies to deliver the largest infrastructure programme in their history to tackle storm sewage discharges – a £56 billion capital investment over 25 years.

Further details on the plans will follow next year.

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