Water campaigners blast 'outrageous' plans to reportedly slash fines for sewage-dumping

Campaigners have blasted the water regulator following reports it is considering slashing fines for sewage-dumping water companies who are struggling financially.

Ofwat is said to be creating a “recovery regime” for Thames Water and other firms which face collapse or restructuring because of high debt.

The companies could face fewer or no fines for water outages and sewage leaks and instead be encouraged to invest in infrastructure, under proposals reportedly being considered.

Charles Watson, founder and chair of River Action,  said: “The idea that Ofwat would slash the fines water companies pay whilst they continue to systematically break the law by illegally polluting our rivers, lakes and seas is just beyond outrageous.

“To put this into perspective, the quantum of fines levied against water companies last year equates to about 1% of the funds that they distributed to their shareholders as dividends. These penalties are already so pathetically small that rather than acting as a deterrent, they incentivise pollution by making illegal sewage dumping eminently affordable. 

“Ofwat has already allowed our water companies to be asset stripped by the financial engineering of their investors to the extent the country’s sewage infrastructure is failing due to woeful under-investment. 

“To now let the water companies off the hook so that they can continue to pollute with impunity whilst paying out large dividends would essentially constitute a government-sanctioned ‘polluters charter’.

“If it were to ever happen, it would undoubtedly be the darkest day for this failed regulator.”

Other debt-laden water companies, including Southern Water, South East Water and Yorkshire Water, may also be eligible for the recovery regime.

Ofwat has delayed the publication of its water company draft determinations until July 11.

This will declare how much water firms will be able to charge customers.

Dr Doug Parr, policy director for Greenpeace UK, said: "If the story is correct the regulator has decided to reward failure, and punish the water companies for devaluing the UK's water supply by giving them less stringent targets, a holiday on regulatory enforcement and more shareholder dividends. 

“Thames Water have got exactly what they were asking for - because it seems that in order to encourage other foreign investors to degrade UK infrastructure and turn our rivers into open sewers, they need to get a reasonable rate of return."

Ofwat declined to comment.