My ministerial colleagues and I have made it clear to water companies that the current use of sewage discharges is unacceptable. I would like to assure you that tackling storm overflows is a priority and the Government is committed to taking action to protect public health and the environment from storm overflow discharges.
Sewage overflows are a Victorian infrastructure issue, and this is the first Government to take steps to tackle them. The Government has published the Storm Overflows Discharge Reduction Plan, which will require water companies to deliver their largest ever environmental infrastructure investment - £56 billion capital investment over 25 years
Water companies will have to achieve a number of strict targets. These targets will mean that water companies need to take measures such as increasing the capacity of their networks and treating sewage before it is discharged to protect public health and prevent pollution, while massively reducing all discharges. Failure to meet these targets could see them face substantial fines or having to return money to customers.
I understand that by 2035, water companies will have to improve all storm overflows discharging into or near every designated bathing water and improve 75 per cent of overflows discharging to high priority nature sites. By 2050, this will apply to all remaining storm overflows covered by our targets, regardless of location. Ministers will review the plan in 2027 to consider where we can go further, taking account of innovation and efficiencies.
Further, under this plan there will be no changes to bills until 2025. These plans strike the right balance between the need for investment and the impact on consumers. The Government has ruled out options which could add up to £817 a year to average household water bills. I am assured that Ministers will continue to monitor water affordability and take further action if needed and will consult on a new water affordability scheme to help less well-off households.
The plan also sets out that water companies will be required to publish discharge information in near real time as well as committing to tackling the root causes of the issue by taking steps to improve surface water drainage. The plan also sets out Ministers’ wider expectations for the water industry, to ensure their infrastructure keeps pace with increasing external pressures, such as urban growth and climate change and to ensure our water supplies remain clean and secure for the future.
The Government has been clear that companies cannot profit from environmental damage. Ofwat have outlined that water companies must be transparent about how executive pay and dividends align to delivery of services to customers, including environmental performance. The Government supports Ofwat’s recent proposals, which would provide extra powers for enforcement action against companies that do not link dividend payments to their environmental performance, or who failed to be transparent about their dividend pay-outs.
The Government, the Environment Agency (EA) and the regulator Ofwat have been working to drive up water companies’ performance and monitoring and increase accountability. This includes a massive expansion in monitoring frequency and duration of discharges, from approximately 5 per cent in 2016 to nearly 90 per cent in 2021, and 100 per cent coverage will be reached by 2023. Ministers have significantly improved transparency through the Environment Act by making it a legal requirement for water companies to provide discharge data to the Environment Agency and to make it available in near real time to the public.
Last year, the EA and Ofwat launched the largest criminal and civil investigations into water company sewage discharges ever, at over 2200 treatment works, following new data coming to light as a result of increased monitoring. The investigations will look at where sites may be breaching their permits and ensure that companies found to be acting illegally are held to account, up to and including prosecution, which can lead to unlimited fines and companies having to reimburse customers. This follows 54 prosecutions against water companies since 2015, securing fines of nearly £140 million.
I am aware that privatisation of the water sector has delivered around £170bn of investment through private finance. This country would not have seen this level of investment if the water industry were in public ownership. This has delivered a range of benefits to customers and the environment, including world-class drinking water, excellently classed beaches and improved customer satisfaction, as well as two-thirds reduction in leakage.
Finally, the Government believes that renationalisation would be a backward step that would cost the taxpayer, reduce investment, and stifle innovation. Ministers will continue to utilise the strong regulatory environment to push companies to ensure they invest and continue to deliver on the public’s priorities.