Ofwat confirms penalties for Anglian and South West

Ofwat has confirmed that Anglian Water and South West Water must pay a total of £86.8m due to breaches of their legal obligations in managing wastewater treatment works and networks. Anglian Water is responsible for £62.8m of this amount, while South West Water will fund £24m. These penalties follow public consultations on the draft decisions published in July.

Ofwat found that both companies failed to operate, maintain and upgrade their wastewater assets adequately, resulting in insufficient capacity to handle sewage and wastewater flows. Additionally, the regulator criticised the lack of oversight by the senior management and boards of both companies.

Anglian Water’s enforcement package:

• Community fund: £5.8m will be allocated to a fund supporting projects that deliver environmental and social benefits for local communities, with a focus on restoring water environments.

• Excess flow management plans: £57m will be invested in developing and implementing plans to manage and optimise wastewater flows in at least eight regional catchments, providing local environmental improvements.

• Accelerated investment: the company will speed up delivery of projects planned for 2025-30 under its Storm Overflows Discharge Reduction Plan, including 36 storm tanks, 45 screens and 42 further deliverables.

• Remediation and compliance plans: Anglian Water will develop a remediation and compliance plan to ensure all storm overflows meet legal requirements highlighted in the investigation.

South West Water’s enforcement package:

• Storm overflow reduction: £20m will be spent in the period 2025-30 to reduce spills from targeted storm overflows, focusing on environmentally sensitive and community areas.

• Local fund for sewer misuse: £2m will be used to address sewer misuse and misconnections, which contribute to environmental pollution.

• Nature Recovery Fund: £2m will support environmental groups working on local improvements through a dedicated fund.

• Commitment to compliance: the company will undertake necessary actions to address the failures identified by Ofwat, securing future compliance.

This announcement marks the closure of five wastewater investigations by Ofwat in 2025, including earlier cases involving Yorkshire Water, Thames Water, and Northumbrian Water. Together these represent £240m of enforcement interventions.

Although Ofwat can impose financial penalties of up to 10% of a company’s relevant turnover, the enforcement packages agreed with the companies mean that the money will be reinvested for tangible improvements, rather than being returned to the Consolidated Fund managed by HM Treasury.