Peers challenge long payment plans for water fines

(by Karma Loveday)

The slow and non payment of fines by water companies has provoked questions in the House of Lords.

In oral questions last week, Lord Sikka challenged the Government for allowing some payment plans to stretch out to 2030, citing 1200 criminal convictions across the industry. He said: “No statement to that effect has been made to Parliament. Can the minister explain why the Government continues to indulge criminal organisations?”

For the Government, Baroness Hayman said: “We don’t indulge criminal organisations. We do put in payment plans because I don’t believe it would help a water company if you enforced it to pay fines so it went bust. I don’t think that helps consumers at all.” She also cited the recent introduction of powers for the Environment Agency to impose automatic penalties.

Other issues raised by peers included that:

• A greater proportion of fines should be used for environmental restoration — one called the current level “a token effort”. 

• Allowing companies to reinvest penalties in their infrastructure is unacceptable — one equating it to paying a driver who has injured a person to fix up their car and possibly sell it on for profit.

• Bill payers should be notified about payment plans as well as penalties.

• To drive change, CEOs should be made to take personal responsibility by losing pay. 

• Ofwat is consulting until 27 February on updating its Performance Related Pay (PRP) prohibition rule, to require water-only companies (WOCs) to prohibit PRP to regulated company board directors, if the firm has recorded one or more category 1 incident in the calendar year preceding the end of the PRP payment year. This will begin in the 2026/27 financial year.

This would align WOCs with water and sewerage company (WASC) requirements. It follows the Environment Agency confirming it will introduce annual environment reports for WOCs for 2026-30, mirroring the established Environmental Performance Assessment for WASCs.