The Water (Special Measures) Act 2025 has received Royal Assent, boosting the powers of water sector regulators to tackle pollution.
This new legislation introduces enhanced powers for regulators to hold water companies accountable for their environmental impact, with particular focus on ensuring water company executives are penalised for failures.
The Water (Special Measures) Act, which applies in England and Wales, covers four key areas:
- A provision which would enable the Government and regulators to block bonuses for water company executives
- A provision which would enable criminal charges to be passed against water companies which persistently break the law
- A provision which would impose automatic, “severe” fines for rule breakers
- A provision to ensure the monitoring of emergency sewage overflows
Photo credit: The Climate Reality Project
A key feature of the Act is the ability for Ofwat to prevent the payment of bonuses to water bosses if their companies do not meet high standards for environmental protection and consumer service. United Utilities chief executive, Louise Beardmore, recently defended her £1.4m pay packet, including a £420k bonus, despite the company behind historic spills in Lake Windermere having been found to have polluted more than any other in 2023.The company is also scheduled to increase consumer bills by 32% over the coming five years.
By enabling regulators to issue automatic penalties for environmental violations, it is hoped the need for lengthy investigations can be reduced. Furthermore, water companies will be required to monitor sewage outlets independently, publishing real-time data on emergency overflows within an hour of discharge. Companies will also need to submit annual Pollution Incident Reduction Plans to show progress in tackling pollution.
However, concerns remain that the water industry will circumvent these new powers by simply increasing bosses’ base pay.