The Environment Secretary has announced that the potential civil penalty is to rise from £250,000 to up to £250 million to help bring quicker enforcement action against water companies for causing pollution.

The Minister will bring forward proposals to raise the civil penalty for water companies who pollute the environment by 1,000-fold.

The move comes as part of the government’s ongoing action to push for water companies to invest more in infrastructure that will minimise pollution incidents and secure our water supply for future generations. Last year there were 62 serious pollution incidents by water companies – up from 44 in 2020.

At present, if water companies fail to uphold the law or cause environmental harm, the Environment Agency (EA) can pursue both criminal and civil prosecutions as part of their enforcement regime.

Whilst fines handed out by the courts through criminal prosecutions are unlimited, these can be a lengthy and costly process. Using civil sanctions – Variable Monetary Penalties (VMPs) – which can be imposed directly by the EA rather than the courts can offer a quicker method of enforcement.

VMPs can be issued for more serious offences, including when there is evidence of negligence or mismanagement or when there is an environmental impact.

However, the current limit for VMPs handed out by the EA for individual breaches of the rules is £250,000. Increasing the cap for fines up to £250 million will simplify and speed up the process of enforcement by allowing the EA to directly hand out penalties to water companies.

New Defra environment secretary demands CSO action

Last month the Environment Secretary asked water companies to write to him, setting out their plans for improving environmental performance and infrastructure. Responses have been received from all water companies and are currently being scrutinised as part of the ongoing work by the government, the Environment Agency and the regulator Ofwat to drive up water companies’ performance and increase accountability. We are clear that water companies should urgently look at opportunities to accelerate infrastructure delivery.

Will fines ever happen?

Meanwhile, reports have questioned whether Ranil Jayawardena’s £250m water pollution penalties may never be levied. Rachel Salvidge, writing in ENDSreport [paywall], said that ‘at first glance, environment secretary Ranil Jayawardena’s pledge to bring forward an increase to the cap on civil penalties for water company pollution 1,000-fold, from £250k to £250m, appeared to be a big win for the environment.’ However, Salvidge goes on to question whether such sanctions could ever happen in light of the Environment Agency having fewer frontline officers, monitoring less, downgrading incidents, and the desire for water firms to self-regulate.

The full news release from Defra can be read here.