Research and analysis

Water and sewerage companies in England: environmental performance report 2023

Published 23 July 2024

Applies to England

A summary of the environmental performance of the 9 water and sewerage companies operating in England.

1. Chair’s foreword

It is with a mix of emotions that I write this foreword to the 2023 performance report containing the Environmental Performance Assessment (EPA). My over-riding sense is one of frustration and disappointment. The results we see are, yet again, simply not good enough.  

The good news is that three companies achieved the maximum four EPA stars compared to one in 2022 – Severn Trent Water, Wessex Water and United Utilities. Credit to Severn Trent for achieving this for the fifth year running. But the performance of most companies lags far behind. We are seeing polarised performance as shown by the number of serious pollution incidents. Over 90% were caused by four water companies – Anglian Water, Southern Water, Thames Water and Yorkshire Water. This is unacceptable.   

Improvements will not happen overnight. Lack of investment in assets over a long period and particularly the last decade means that problems have often been addressed reactively. We welcome Ofwat’s draft determination for the next five year control period which should allow investment in many of the critical pieces of infrastructure needed to meet legal requirements. We will play our role in ensuring that the companies deliver these projects.  

But it is not just about money. The culture within some water companies can also perpetuate poor practices. For example, some simply do not understand the root cause of their problems and incidents are not reported in a timely manner – this is vital for improving transparency and trust across this sector. We know that with a changing climate, the country is going to experience more extreme weather patterns, increased rainfall and more rapid drought. Water companies must ensure that assets are resilient enough to withstand these challenges. We will not take ‘bad weather’ as an excuse for poor environmental performance.  

We take our responsibility to protect the environment very seriously. The regulations are clear, and we enforce them robustly. We have taken tough action against companies breaking the rules and have several serious investigations in progress. But we need to go further. 

We have agreed with the Department for Environment, Food and Rural Affairs (Defra), our sponsor department, a major increase in Environment Agency inspections of water company assets to provide assurance that they are meeting the requirements. We will carry out 4,000 such inspections this financial year and over 10,000 next year.  To support this, we are investing in our digital systems, regulatory tools and increasing our enforcement activity. You can find the full list of our commitments in our business plan 2024 to 2025. We will ensure that the findings of these inspections are made public. And we are working closely with Steve Reed MP, Secretary of State, on new legislation to strengthen our legal powers and penalties for pollution.

We have worked with companies to review their first drainage and wastewater management plans. These will ensure companies change to proactive investment in asset health and maintenance, to reduce risks and put headroom into their systems to deal with future challenges like climate and population growth. 

Since 2011 the EPA and wider reporting have provided an independent and objective comparison of water and sewerage companies’ performance As the regulator we constantly tighten EPA targets – which has been fundamental in driving better performance.  If the tighter standards we now apply had been in place in 2011, water companies would only have achieved 11 stars in comparison to the 25 they achieved in 2023.  Whilst this shows some improvement over that time, current performance is still a long way from meeting our expectations. We are reviewing the EPA to strengthen and broaden the metrics from 2026. 

With additional resources in place, a focus on transparent inspection and regulation, tightened EPA metrics and new legal powers, we are bringing stronger regulation to this sector in the coming year. We shall continue to drive for improved performance.

Alan Lovell, Chair of the Environment Agency

2. Performance facts for 2023

This report is about the 9 water and sewerage companies (called water companies within this report) that provide clean drinking water (water supply) and wastewater (sewerage) services. Water supply only companies, and companies providing localised water supply and sewerage services are not covered in this report. This report includes our Environmental Performance Assessment (EPA) for several core requirements as well as broader assessments of other aspects of environmental performance in 2023.

For 2023, the main performance facts for the sector are that:

• 5 water companies are rated as requiring improvement (2 stars) in our EPA, 1 is rated as good (3 stars) and 3 achieved 4 stars – all water companies should be able to achieve 4 stars
• there was a small improvement in star ratings with some water companies meeting our metric targets consistently in this EPA period so far (since 2021) – however the majority continue to underperform as they are not getting the basics right, such as minimising pollution incidents and achieving permit compliance
• the number of serious pollution incidents (category 1 and 2) increased to 47, remaining unacceptably high and not trending towards zero – mainly due to the performance of 3 water companies, resulting in a very polarised performance picture across the sector
• for the serious pollution incident EPA metric, Northumbrian Water and Severn Trent Water had zero incidents, however 4 water companies performed significantly below target (red) – numbers are dominated by serious pollution incidents from the assets of Anglian Water, Southern Water and Thames Water, with Yorkshire Water also rated red
• total pollution incidents from sewerage and water supply assets (category 1 to 3) increased to 2,174 – the second consecutive annual increase and highest number recorded since 2019
• total pollution incidents from sewerage assets increased to 1,902 with no water company achieving target (green), the first time for any metric since the EPA began in 2011 – Southern Water and South West Water continued to perform significantly below target (red) with Anglian Water also rated red
• self-reporting of all pollution incidents by water companies was 84%, and 93% for just pumping stations (PS) and sewage treatment works (STW) combined – this was the best since the EPA began however 3 water companies performed below target (amber) including a notable deterioration by Southern Water
• 98.8% of STW and water treatment works (WTW) were compliant with numeric permit conditions for discharging treated wastewater – although 6 water companies achieved target (green), the poor performance of 3 water companies, including South West Water (the only red water company), means the sector is not improving
• for the satisfactory sludge use and disposal EPA metric, all water companies performed better than target (green)
• for the Water Industry National Environment Programme (WINEP) EPA metric 99.2% of planned environmental improvement schemes were completed – 3 water companies failed to meet all requirements within planned deadlines (Thames Water rated red, Anglian Water and South West Water rated amber)
• for the Supply Demand Balance Index (SDBI) EPA metric all water companies achieved target (green)

3. Environmental Performance Assessment (EPA)

3.1 EPA for 2023

We introduced the EPA in 2011 as a tool for comparing performance between water companies and across years for several core requirements. Please refer to our EPA metric guide for more information on our regulation and how we set targets for water companies. It includes our definition of red, amber and green status and thresholds for each metric, and our star ratings for performance across all metrics. For 2023 the 7 EPA metrics are:

• total pollution incidents (sewerage assets only)
• serious pollution incidents (sewerage and water supply assets)
• self-reporting of pollution incidents (sewerage and water supply assets)
• discharge permit compliance (STW and WTW numeric water quality limits for treated wastewater only)
• delivery of the WINEP
• satisfactory sludge use and disposal
• SDBI

Every 5 years we review the EPA to align with the 5 year Asset Management Plan (AMP) investment cycles for water companies. For 2021 to 2025 we have revised metric definitions and deliberately tightened metric thresholds. We consulted with the water companies and stakeholders and released a revised EPA methodology for this period. This describes our updated reporting approach and EPA for use for 2021 to 2025 data reporting. For 2023 the changes we have implemented are:

• total pollution incident metric thresholds have been tightened as part of the 5 year glidepath
• serious pollution incident metric thresholds have been tightened as part of the 5 year glidepath
• the SDBI metric now includes an assessment of the timeliness and quality of water company data submissions

Please see the EPA results for 2023. Five water companies are rated as requiring improvement, 2 stars (Anglian Water, Southern Water, South West Water, Thames Water and Yorkshire Water). One water company is rated good, 3 stars (Northumbrian Water). Three water companies achieved our industry leading rating of 4 stars (Severn Trent Water, United Utilities and Wessex Water).

Ofwat (the economic regulator of water companies) is using 2 of our EPA metrics as common performance commitments for 2020 to 2025. Total pollution incidents and discharge permit compliance performance may have financial consequences for water companies.

3.2 EPA for 2021 to 2025

The aim of the EPA is to highlight where improvement in water company performance is required. We are pushing for continuous improvement in standards across the sector and to make sure that statutory obligations and our performance expectations are met.

During this 5 year EPA period (2021 to 2025) we are ranking water companies based on cumulative star ratings. This highlights water company progress towards achieving industry leading performance (4 stars) and identifies water companies that have been able to sustain this. The 2023 EPA results show a small sector improvement in star ratings compared to 2021 and 2022 (Table 1) – a total of 25 stars out of a maximum of 36. Despite this the sector continues to underperform with 5 of the 9 water companies requiring improvement. However, Severn Trent Water has shown that sustained leading performance is possible across the EPA metrics. They are the only water company to consistently achieve 4 stars in the last 5 years including for this EPA period so far (since 2021).

Table 1. Ranked cumulative EPA performance star ratings for the 9 water and sewerage companies 2021 to 2025 – each year a maximum of 4 stars

Water company	2021 (year 1)	2022 (year 2)	2023 (year 3)	2024 (year 4)	2025 (year 5)	Total
Severn Trent Water	4 stars	4 stars	4 stars	no data	no data	12 stars
United Utilities	4 stars	3 stars	4 stars	no data	no data	11 stars
Northumbrian Water	4 stars	3 stars	3 stars	no data	no data	10 stars
Wessex Water	2 stars	2 stars	4 stars	no data	no data	8 stars
Yorkshire Water	2 stars	3 stars	2 stars	no data	no data	7 stars
Anglian Water	2 stars	2 stars	2 stars	no data	no data	6 stars
Thames Water	2 stars	2 stars	2 stars	no data	no data	6 stars
Southern Water	1 star	2 stars	2 stars	no data	no data	5 stars
South West Water	1 star	2 stars	2 stars	no data	no data	5 stars
Sector	22 stars	23 stars	25 stars	no data	no data	70 stars

For historic results please see our Environmental Performance Assessment results 2011 to 2023 and Environmental Performance Assessment star ratings 2011 to 2023. Water company specific reports with data for 2011 to 2023 are also available.

3.3 Performance expectations (2020 to 2025)

In October 2017 we set out our performance expectations for 2020 to 2025 (Water Industry Strategic Environmental Requirements, WISER) describing environmental, resilience and flood risk obligations. Water companies were required to take these into account when developing their business plans for the AMP7 period 2020 to 2025.

We have the following expectations of water companies that are directly relevant to the EPA:

• trend to minimise all pollution incidents (category 1 to 3) by 2025 – there should be at least a 40% reduction compared to numbers of incidents recorded in 2016
• serious pollution incidents must trend towards zero
• a plan in place to achieve 100% compliance for all licences and permits and 100% compliance with all look-up table conditions (where a limit cannot be exceeded more than a specified number of times in a 12 month period)
• high levels of self-reporting of pollution incidents with at least 80% of incidents self-reported by 2025 and more than 90% of incidents self-reported for just STWs and pumping stations (PS) combined
• business plans include all measures identified within the WINEP and these are planned well and completed to agreed timescales and specification
• assess resilience of their water supply system to predicted droughts and other non-drought water supply hazards
• manage sewage sludge treatment and re-use so as not to cause pollution to land, surface water or groundwater

Most water companies translated our expectations into performance commitments for their 2020 to 2025 business plans. These performance commitments are regulated by Ofwat and may have financial consequences for water companies.

We expect water companies to be open and honest with us. They must take ownership of their performance issues to ensure our WISER performance expectations and EPA targets are met. In some cases the culture within water companies affects how they engage with us including excessive challenge of our regulatory decisions.

4. Pollution incident performance

Pollution incidents lead to the release of harmful substances into air, land or water, and some can cause significant harm to the environment. We categorise all incidents based on their impact. Incidents are assessed as having a major (category 1), significant (category 2), or minor (category 3) impact on the water environment. Please refer to our EPA metric guide for more information.

We remain concerned about the high number of pollution incidents. You can find details of how we are taking action with the water companies in section 11 of this report (regulatory interventions). Water companies must manage their drainage and wastewater systems so that they do not pollute. Maintaining assets to be in good operational condition is a basic requirement. This includes being prepared for the effects of climate change, ensuring that assets are robust and resilient to extreme weather.

Storm overflows are a necessary part of the current sewerage system. They are designed to discharge storm sewage (wastewater diluted with rainwater) to rivers or the sea at times of rainfall or snow melt. This is to prevent storm sewage backing up into homes and flooding streets. If they are operating outside of these circumstances, they are deemed non-compliant with their permit and they will be reported and recorded as pollution incidents. Monitoring of storm overflows has increased to capture information on how they are operating. This is covered in section 7.2 of this report (Event Duration Monitoring, EDM, of storm overflows).

4.1 Serious pollution incidents

The number of serious water quality pollution incidents (category 1 and 2) from sewerage and water supply assets for the sector remains unacceptably high (Figure 1). This is contrary to our performance expectation to trend towards zero. This expectation was first set out to water companies in 2013 (for the AMP6 period 2015 to 2020). It was repeated in WISER (issued in 2017) for the period 2020 to 2025. In 2023: 

• there were 47 serious pollution incidents, an increase from 44 in 2022, following 62 in 2021, 44 in 2020 and 52 in 2019 – numbers remain unacceptably high
• the majority of serious pollution incidents (38 of the 47) were from the assets of 3 water companies (Thames Water – 14, Southern Water – 13 and Anglian Water – 11) – resulting in a very polarised performance picture that is preventing the sector achieving our performance expectation and their commitment to trend to zero
• 4 water companies performed significantly below target (red) for this EPA metric (Anglian Water, Southern Water, Thames Water and Yorkshire Water) – Anglian Water and Thames Water have dominated serious pollution incident numbers for many years and Southern Water’s incident numbers have been erratic
• 4 water companies achieved performance better than target (green) for this EPA metric – of these Severn Trent Water and United Utilities have been consistently green in this EPA period so far (since 2021)
• Northumbrian Water and Severn Trent Water had no serious pollution incidents – which shows that the performance expectation can be met
• for the sector most of the serious pollution incidents continue to be from foul sewers (16) followed by STW (14, which doubled from 7 in 2022), and rising mains (11) – together representing 87% of all serious pollution incidents
• we are concerned about the increase in number of serious pollution incidents from rising mains – we are working with the water companies to understand the increase and what actions they are taking
• there was 1 serious pollution incident from water supply assets (from the water distribution system of Thames Water) with 8 water companies having zero – sector numbers have been decreasing since the high of 14 in 2017

Figure 1. Number of serious pollution incidents (category 1 and 2) from sewerage and water supply assets, and trend for the 9 water and sewerage companies 2011 to 2023

For the most serious (category 1) pollution incidents, in 2023:

• there were 7 compared to 6 in 2022, 8 in 2021 and 3 in 2020, all from sewerage assets
• Southern Water had 4 category 1 incidents, Thames Water had 1, United Utilities had 1 and Yorkshire Water had 1

4.2 Total pollution incidents

In recent years the total number of water quality pollution incidents from sewerage and water supply assets has been increasing (Figure 2). This is unacceptable as the sector should be progressing towards our WISER performance expectation for the period 2020 to 2025. Water companies must show a trend to minimise pollution incidents with at least a 40% reduction compared to the number of incidents (1,902) in 2016. In 2023: 

• there were 2,174 incidents from sewerage and water supply assets, an increase from 2,026 in 2022, 1,883 in 2021 and 1,919 in 2020 – the second consecutive annual increase and highest number recorded since 2019
• there were 272 incidents from water supply assets – a reduction compared to 368 in 2022, and mostly from the water distribution system (250 in 2023 compared to 345 in 2022)
• the vast majority of incidents were from sewerage assets

Figure 2. Number of pollution incidents (category 1 to 3) from sewerage and water supply assets, and trend for the 9 water and sewerage companies 2011 to 2023

Our EPA metric assesses the total number of water quality pollution incidents from water company sewerage assets. In 2023:

• there were 1,902 sewerage pollution incidents, compared to 1,658 in 2022 – this is the worst performance since 2019 with 8 water companies having an increase compared to the previous year
• no water company achieved our EPA target (green), the first time for any metric since the EPA was introduced in 2011 – and a disappointing decline from the previous 2 years when we reported 4 water companies achieved green in each of those years
• 3 water companies performed significantly below target (red) for this EPA metric – Anglian Water for the first time, Southern Water for the fifth year in a row and South West Water for all 13 EPA reported years
• 6 water companies performed below target (amber) for this EPA metric
• if all water companies had achieved green EPA status in this metric there would have been at least 764 fewer sewerage pollution incidents and less environmental harm
• most of the incidents were from foul sewers (670), followed by STW (487) and PS (472)

4.3 Self-reporting of incidents

We expect water companies to report pollution incidents to us in a timely way before others do. Without a rapid response, the impact of pollution can escalate and the opportunity for mitigation measures can be lost. In recent years we have seen some water companies achieve the high levels of self-reporting of pollution incidents as required by our WISER expectation. We expect all water companies to achieve and maintain this in future years. We also assess the self-reporting percentage for incidents from just STW and PS combined. We expect higher self-reporting for incidents from these permitted assets. They normally have alarms or staff on site so there is a greater chance of an incident being reported first by water companies.

In 2023:

• for the EPA metric, 84% of all recorded incidents were self-reported by water companies, the best since the start of the EPA – an improvement compared to 82% in 2022, 77% in both 2021 and 2020, 80% in 2019 and 76% in the previous 2 years
• for the EPA metric, 93% of all recorded incidents from just PS and STW combined were self-reported, compared to 92% in 2022 and 88% in 2021 – this continues the improving trend, since the additional EPA target of 90% for these assets was introduced
• 3 water companies performed below target (amber) for the EPA metric – Southern Water (with a notable deterioration), Thames Water and Yorkshire Water
• 6 water companies performed better than target (green) for the EPA metric – of these Northumbrian Water, Severn Trent Water and Wessex Water have been consistently green in this EPA period so far (since 2021)
• there was a big variation (25%) between the best and worst performing water companies – Northumbrian Water, United Utilities and Wessex Water performed the best (94%) and Southern Water disappointingly performed the worst (69%) having previously been one of the highest performers
• 74% (35 out of 47) of serious pollution incidents (category 1 and category 2) were self-reported by the water companies – an increase from 48% in 2022 and 56% in 2021, however given the environmental impact of these incidents we want to see further improvement

5. Compliance with licences and permits

All water companies have licences and permits and are required to comply with them at all times. We set conditions to control the impact that licensed and permitted activities are allowed to have, based on the nature and sensitivity of the receiving environment. Water companies must comply with these conditions to reduce their impact and protect the water environment. You can find details of how we are taking action with the water companies in section 11 of this report (regulatory interventions).

The EPA includes assessment of compliance with numeric permit conditions to discharge treated wastewater from STW and WTW (not storm overflows). We plan to expand the EPA in the future (2026 to 2030 data reporting) to cover more aspects of water company permit compliance.

The increased monitoring of storm overflows is covered in section 7.2 of this report (EDM of storm overflows). This will allow us to further assess and report on compliance of the wider sewerage network in the future.

5.1 Discharge permit compliance (numeric)

This section is about water company compliance with permits to discharge treated wastewater from STW and WTW (not storm overflows). As part of the EPA we assess compliance with conditions in these permits that set numeric limits for pollutants in the discharges.

Compliance for the sector is not improving (Figure 3). It is a statutory obligation to comply with permits. Our WISER performance expectation for 2020 to 2025 sets out that water companies should have a plan in place to achieve 100% compliance. In 2023:

• 98.8% of STW and WTW were compliant, compared to 99.0% in 2022, 98.7% in 2021, 99.2% in 2020 and 98.7% in 2019
• out of 3,800 STW and WTW permitted discharge outlets there were 45 non-compliant sites compared to 38 in 2022, 49 in 2021, 31 in 2020 and 49 in 2019 – no water company achieved 100% compliance with their permits
• South West Water performed significantly below target (red) with 12 non-compliant sites (96.2%) – a disappointing decline in performance from green status and 2 failing sites in 2022, and showing inconsistency in recent years
• Anglian Water had the most non-compliant sites (13) performing below target (amber) alongside Northumbrian Water (3)
• 6 water companies achieved target (green) for this EPA metric – of these Severn Trent Water, Thames Water, Wessex Water and Yorkshire Water have been consistently green in this EPA period so far (since 2021)
• there would have been at least 16 fewer non-compliant sites if all water companies had achieved green EPA status

Figure 3. Number of STW (and from 2016 including WTW) failing discharge permit numeric limits and trend for the 9 water and sewerage companies 2011 to 2023

As with wastewater from STW, adequate treatment of discharges from WTW is essential to make sure water companies do not pollute the receiving environment. For 2023, WTW compliance improved to the highest level in recent years. However further improvement is required as WTW compliance remains lower than STW compliance. In 2023:

• 97.8% of WTW permitted discharge outlets were compliant (compared to 98.9% for STW) – an improvement on 97.4% in 2022
• out of 273 WTW permitted discharge outlets, 6 WTW were non-compliant, the lowest number since WTW were included in the EPA from 2016 – this compares to 7 in 2022, 9 in 2021, 8 in 2020, 12 in 2019 and 2018, 13 in 2017 and 20 in 2016

5.2 Abstraction and impoundment licence compliance

Water companies hold abstraction and impoundment licences that allow them to abstract water from the environment or impound water. For 2023, out of 1,213 licences, we have so far assessed 14 as non-compliant (98.8% compliance).

We are continuing our assessment of 2023 performance using recent returns of abstracted quantities from the water companies for the period to 31 March 2024. We are developing a new system for collating abstraction data, so that abstraction and impoundment licence compliance can be reported as an EPA metric.

5.3 Waste permit compliance

Water companies operate a variety of waste facilities ranging from biowaste treatment, landfill, biogas combustion, sludge incineration and transfer stations. For permitted activities we assess compliance and give a compliance band from A or B (good) to F (poor). For sites in compliance bands C and D the operator must improve to achieve full compliance and sites in bands E and F must significantly improve.

In 2023, out of 273 permitted operations:

• 6 were assessed as band E (all are operated by Severn Trent Water)
• 8 were assessed as band D (2 each are operated by Anglian Water and Yorkshire Water and 1 each by Southern Water, Thames Water, United Utilities and Wessex Water)
• 6 were assessed as band C (2 each are operated by Anglian Water, Southern Water and Yorkshire Water)

This represents a decline in performance compared to 2022 when there were 4 band D operations, and 2021 when there was 1 band D and 1 band E operations. Despite this there were no serious pollution incidents (category 1 or 2), but there were 10 incidents that caused minor impacts to air (category 3) – these were from 9 permitted waste facilities operated by 4 of the 9 water companies.

5.4 Reservoir compliance

Water companies operate 609 large raised reservoirs, with legal requirements for them to be supervised and regularly inspected by qualified civil engineers. In 2023, 7 were recorded as non-compliant (4 Northumbrian Water, 2 South West Water, 1 Yorkshire Water). Five of these returned to compliance by the end of 2023. Two of Northumbrian Water’s sites remained non-compliant into 2024.

All water company reservoirs were compliant with the requirement to have a certified on-site emergency flood plan in 2023. This plan sets out procedures in case of a reservoir incident.

We are currently delivering a reservoir safety reform programme. We are working with Defra to make changes to how we regulate reservoirs, in response to the independent reservoir safety review report. We are working with water companies and other stakeholders in the reservoir sector and encourage ideas and feedback throughout this process.

Maintaining reservoir safety continues to be our priority. We will continue to work with water companies to make sure high standards of reservoir safety are kept at all times. We encourage water companies to engage in open dialogue with us. We are happy to discuss mitigation measures and will always take a proportionate approach to enforcement action.

6. Satisfactory sludge use and disposal

Sewage sludge is a product of wastewater treatment. Water companies must manage sewage sludge treatment and re-use so as not to cause pollution to soil, surface water or groundwater. The EPA sludge metric measures the percentage of sewage sludge produced that is dispatched and used or disposed of in a satisfactory manner. We review water company data to check compliance with relevant environmental legislation. These include the Sludge (Use in Agriculture) Regulations (SUiAR) and the Environmental Permitting (England and Wales) Regulations (EPR). For 2023:

• the 9 water companies dispatched 819,001 tonnes (dry solids) of sewage sludge – 93.8%% of this was used in agriculture (across 151,921 hectares of land)
• all water companies performed better than target (green) for this EPA metric, the same as in 2022
• 5 water companies (Northumbrian Water, Severn Trent Water, Thames Water, United Utilities and Wessex Water) reported 100% satisfactory sludge use and disposal
• 4 water companies reported below 100% – Anglian Water (99.43%), Southern Water (99.28%), South West Water (99.77%) and Yorkshire Water (99.84%)

We have published a regulatory position statement with conditions enabling the supply, storage and spreading of sewage sludge containing other materials (on GOV.UK in February 2022). Work continues around our strategy for safe and sustainable sludge use (published on GOV.UK). We continue to assess water company sludge disposal and use. We are promoting innovation through the price review (PR24) investment process, for 2025 to 2030, to achieve good environmental outcomes.

7. Progress with environmental improvement schemes

7.1 Water Industry National Environment Programme (WINEP)

In 2019 Ofwat set the prices that water companies could charge their customers between April 2020 and March 2025. As part of that price review (PR19) we developed and published a WINEP for each water company. Our expectation for all planned schemes (including asset improvements, investigations and monitoring) to be completed to agreed timescales and specification was not met by all water companies. The EPA WINEP metric assesses completion of all improvement schemes and most investigation schemes.

For the financial year ending March 2024 (cumulative progress for years 1 to 4 of the WINEP) for WINEP schemes in the EPA:

• 99.2% (3,481 out of 3,508) met requirements within planned deadlines
• Thames Water performed significantly below target (red) due to 19 water quality schemes not meeting requirements within planned deadlines (93.4%)
• 2 water companies performed below target (amber) due to water quality schemes not meeting requirements within planned deadlines – Anglian Water (99.6%, 3 schemes), South West Water (98.8%, 5 schemes)
• 6 water companies met all requirements (100%, green) within planned deadlines – of these Northumbrian Water, Severn Trent Water, United Utilities, Wessex Water and Yorkshire Water have been consistently green in this EPA period so far (since 2021)

We also track percentage completion of additional WINEP schemes, which are not part of the EPA metric – the installation of EDM on storm overflows (section 7.2) and investigations of flow monitors at STW. For the financial year ending March 2024 (cumulative progress for years 1 to 4 of the WINEP), for WINEP schemes not in the EPA:

• 96.0% (4,574 out of 4,763) met requirements within planned deadlines – with 100% EDM coverage achieved
• 8 water companies met all requirements (100%) within planned deadlines
• Southern Water did not meet requirements within planned deadlines for 190 investigations of flow monitors at STW

7.2 Event Duration Monitoring (EDM) of storm overflows

Water companies have installed EDM on their storm overflows to capture performance information (how often and for how long they are used). Water companies met their obligation to monitor all storm overflows by December 2023.

We received the 2023 annual data returns from water companies operating in England at the end of February 2024 (this includes Dŵr Cymru Welsh Water storm overflows in England). Based on these we can confirm that 100% of storm overflows had monitoring installed by the end of 2023. At the end of March 2024 we published the EDM storm overflow 2023 annual return dataset. This is the fourth year that we have published the full data. In 2023:

• the annual return dataset included 14,114 storm overflows across the 9 water companies (Table 2 – not including Dŵr Cymru Welsh Water)
• 100% of storm overflows had EDM commissioned (meaning reliable data was expected)
• 86.51% of storm overflows had EDM in operation for 90% or more of the time
• the average number of spills per overflow across all water companies was 33
• 40% of storm overflows spilled less than 10 times
• 13.9% of storm overflows did not spill at all

The annual return dataset also includes water company reasons for performance issues with monitors and reasons for high spill counts.

We are reviewing the EPA for the 2026 to 2030 data years. We intend to include a storm overflows metric to assess the number of EDM monitors reporting reliable data. Our ambition for 2031 onwards will be to broaden the metric to assess compliance and environmental impact.

Table 2. Summary facts from the storm overflow 2023 annual return dataset, ranked by the percentage of storm overflows with equal to or greater than 90% EDM operation for the 9 water and sewerage companies

Water company	Number of storm overflows with EDM commissioned	Percentage of storm overflows with EDM commissioned	Percentage of storm overflows with equal to or greater than 90% EDM operation
Wessex Water	1,295	100%	95.6%
Anglian Water	1,432	100%	93.2%
United Utilities	2,255	100%	88.4%
South West Water	1,356	100%	87.1%
Northumbrian Water	1,565	100%	86.8%
Southern Water	976	100%	85.5%
Severn Trent Water	2,426	100%	83.0%
Yorkshire Water	2,190	100%	81.7%
Thames Water	619	100%	75.4%

8. Security of water supply

The water companies are responsible for providing clean drinking water (water supply). Water resources management plans (WRMPs) set out how the water companies intend to achieve secure supplies of water for customers and a protected and enhanced environment. The EPA SDBI metric assesses how the actual supply demand balance has performed compared to what is in water company WRMPs. It measures the risk a water company has experienced for the previous year in terms of supplying water to its customers. Water companies are expected to have a score of 100. For the period April 2023 to March 2024 all water companies achieved target (green) for this EPA metric, reporting a score of 100.

9. Delivery of water resources management plans (WRMPs)

Water companies must prepare WRMPs at least every 5 years to cover a minimum period of at least 25 years. They include forecasts for per capita consumption, metering and leakage, that water companies need to achieve. By meeting these forecasts, public water supplies will remain secure, and the water environment should be protected.

Each year water companies must review their latest published WRMP (currently for April 2020 to March 2025) and report to us on progress. We assess the annual reviews, together with Ofwat, and report our findings to Defra who are responsible for the statutory WRMPs.

This section presents findings from our last completed annual review of water company information for the period April 2022 to March 2023. We receive water company submissions for annual reviews in late June each year. Therefore, we have not yet completed the annual review for April 2023 to March 2024 and are unable to present our findings for this period.

9.1 Average household consumption (per capita consumption, PCC)

Targets for reducing water consumption levels are included in the government’s Environmental Improvement Plan. These include a target to reduce PCC by 20% by 31 March 2038 (compared to the 2019 to 2020 baseline reporting figures).

From April 2022 to March 2023 average household PCC was 140 litres per head per day. This has reduced from 142 litres per head per day compared to the year before. Most water companies had PCC higher than forecast for the year – reasons for this include greater demand during the widespread drought of 2022.

9.2 Leakage

Ofwat has set a target for all water companies to meet a 16% reduction in leakage by the end of March 2025, compared to April 2017 to March 2018. We expect water companies to be proactive and explore innovative approaches to reduce their leakage. This will contribute to the sector’s commitment to reduce leakage by 50% by 2050 and achieve the targets set out in the Environmental Improvement Plan.

From April 2022 to March 2023 total leakage for the water companies was 2,312 megalitres per day. This is an increase of 23 megalitres per day from the previous year. Only 3 water companies reported a reduction in leakage, and only 2 kept leakage within the levels they planned for the year.

9.3 Metering

Water companies are planning for a continued increase in metering. Metering, particularly smart metering, is considered to have a significant role in identifying leakage and helping customers manage demand.

All water companies have a planned metering programme. We expect any water company that is behind on their planned delivery programme to take immediate action.

From April 2022 to March 2023 household metering including unoccupied properties increased to 58.33%, an increase of 1.4% from the previous year.

10. Flood and coastal erosion risk management (FCERM)

Under the Flood and Water Management Act 2010, water companies are Risk Management Authorities (RMAs). This means they must act in a manner consistent with the National FCERM strategy for England and have a duty to cooperate with other RMAs. Between April 2023 and March 2024 water companies have:

• responded to flood incidents, including participating in multi-agency responses
• worked with partners to reduce flood risk and provide wider benefits for communities, including water quality and amenity benefits
• used strategic partnerships, including with Regional Flood and Coastal Committees to align investment planning and funding
• finalised their drainage and wastewater management plans (DWMPs) and submitted their draft business plans to Ofwat in October 2023
• engaged with local communities, including local flood action groups, schools, farmers and others

Between April 2023 and March 2024, water companies invested:

• £87.8 million to reduce the risk of sewer flooding to properties
• £167.8 million to maintain the public sewer system to prevent blockages and flooding
• £12.9 million in property-level protection and mitigation measures to reduce the likelihood of customers’ homes experiencing sewer flooding

Winter 2023 to 2024 was one of the wettest on record for many areas of the country. Water companies worked with other RMAs to mitigate flooding from multiple sources. Several water companies also improved their approach to incident management. High groundwater levels had effects on some companies’ sewer networks, testing the groundwater infiltration reduction plans they have developed for vulnerable catchments.

Data sharing between water companies and other RMAs is a means of improving delivery of flood risk management outcomes. There have been improvements this year although post event data sharing can be improved across the sector. We are working with the water companies to identify and share good practice, using digital portals and SharePoint sites to enable partnership working.

New partnerships are forming, especially to deliver sustainable drainage and nature-based solutions. Managing surface water flooding in this way can mean fewer storm sewer overflows, which improves water quality. There have been good examples of partnership and integrated working this year. For example:

• Severn Trent Water’s ‘Green Communities’ initiative – which aims to manage flood water more naturally by creating small gardens where the water can collect, then slowly drain away
• Southern Water’s pathfinder projects to remove surface water from sewers through a range of innovative approaches and partnerships
• United Utilities worked with Bolton Council to install rain gardens and permeable surfaces at a new park in Bolton town centre – this will reduce surface water entering the sewer system
• Wessex Water partnered with Somerset Council and Somerset Rivers Authority – they produced an integrated catchment model of Minehead which has resulted in a number of future integrated flood management projects

Innovation looks strong across the sector. For example:

• water companies are supporting us to develop flood and coastal innovation including through the £200 million flood and coastal innovation programmes – 8 water companies are working in partnership to test new approaches and develop the evidence base for adaptation and resilience
• Yorkshire Water have engaged with communities using an interactive digital game that allows residents to help design streets with sustainable drainage

11. Regulatory interventions

We are taking action against the water companies by challenging them to address areas where they are failing or not meeting our performance expectations. We describe these actions in the following sections.

11.1 Enforcement and sanctions

The Sentencing Council’s definitive guidelines for environmental offences came into force on 1 July 2014. It improved guidance and reduced inconsistencies in sentencing, including the levels of fines handed down by the courts. Between 2015 and 5 July 2024 there have been 63 prosecutions of water companies (some involving multiple cases) securing fines of over £151 million (Table 3). In 2023:

• we completed 4 prosecutions against 4 different water companies which led to total fines of £6,794,000 – 3 prosecutions resulted from pollution incidents and 1 from over abstraction
• prosecution fines ranged from £510,000 to £3,334,000
• we accepted 5 enforcement undertaking offers from 3 different water companies totalling £1,762,500 and ranging from £50,000 to £1,000,000

Table 3. Enforcement and sanctions for the 9 water and sewerage companies 2015 to 5 July 2024

Year	Number of prosecutions	Value of prosecution fines	Number of enforcement undertakings	Value of enforcement undertakings
2015	9	£2,494,500	0	£0
2016	10	£6,560,000	4	£595,000
2017	9	£21,589,334	15	£1,435,900
2018	3	£427,000	15	£3,432,150
2019	5	£3,097,000	11	£2,429,760
2020	3	£852,000	14	£2,465,901
2021	7	£102,490,000	9	£1,703,272
2022	9	£4,198,750	3	£500,000
2023	4	£6,794,000	5	£1,762,500
2024 (to 5 July)	4	£2,727,000	1	£200,000

Table note: cases against a water company sentenced in court on the same day count as one prosecution. If a prosecution has an appeal hearing it is recorded here according to the date of the hearing not the original prosecution.

There are 4 outcomes that we seek to achieve through enforcement. These are to:

• stop illegal activity from occurring
• put right environmental harm or damage
• bring illegal activities under regulatory control
• punish and deter future offending

Prosecution continues to be an important response where it is in the public interest, as a proportionate and outcome focused enforcement option to protect the environment. Prosecution is rightly reserved for those pollution incidents and permit or licence breaches where there is serious, actual or potential environmental harm and a high level of culpability. Fines continue to reflect the size of the organisation concerned as well as the offence category. Sentencing is a matter for the courts who fine on a case-by-case basis, and for this reason fines vary significantly.

An enforcement undertaking is a voluntary agreement offered by those who have committed a less serious offence that becomes legally binding once accepted. It funds local environmental improvements but also requires that steps are taken to put right what went wrong and to prevent it happening again.

A variable monetary penalty is a proportionate monetary penalty we may impose on a company that commits certain environmental offences. In 2023 we imposed 1 variable monetary penalty of £150,000 for an offence under Section 4(1) of the Salmon and Freshwater Fisheries Act 1975. Variable monetary penalties were not available for EPR offences until December 2023, when an amendment came into force. In addition, an amendment was also made to the Environmental Civil Sanctions (England) Order 2010. This removed the £250,000 cap per variable monetary penalty, allowing us to impose penalties of any amount. We expect these changes to result in an increase in our use of variable monetary penalties.

Before taking action, we must investigate to gather evidence, consider the facts and establish matters relevant to public interest and sentencing. This takes time and our enforcement activity can conclude some months or years after the original offence occurred, particularly court cases. We are continuing with our major investigation of all the water companies into potential wastewater treatment works flow-to-full treatment (FFT) non-compliance.

11.2 Improving water company performance

Our role is to regulate the water companies to make sure they comply with the law and protect the environment. We have set clear expectations for them since 2013. It is their responsibility to meet the conditions we set in their licences and permits and meet their statutory obligations.

As the regulator we are:

• using the uplift in water quality permit charges, that has secured £55 million of additional funding each year, to transform the way we regulate the water industry – with up to 500 staff making up dedicated teams and investment in new digital systems
• transforming the way we regulate through our Water Industry Regulation Transformation Programme – inspecting more sites, increasing our attendance at pollution incidents, completing more in-depth root cause audits, using more data to check compliance and increasing our enforcement
• conducting our largest ever criminal investigation of all water companies into potential STW flow-to-full treatment (FFT) non-compliance
• continuing to track progress of water company Pollution Incident Reduction Plans (PIRPs) to influence inclusion of effective actions
• scrutinising PIRP information provided by each water company detailing interventions they have delivered, and benefits seen – the outputs will improve our understanding of industry delivery and identify follow up actions given the continued high industry pollution incident numbers
• working with water companies to develop investment plans through the WINEP for 2025 to 2030 to meet requirements of the government’s storm overflow discharge reduction plan – this sets targets for water companies to improve all overflows beginning with discharges into or near designated bathing waters and high priority nature sites
• engaging with Water UK and water companies as they prepare for a new duty from 2025 to monitor and report EDM data from storm overflows in near real time (live) – water companies have agreed to publish this data on a voluntary basis before 2025 and we will be using this as intelligence to inform our regulatory work
• reviewing our reporting and the EPA to strengthen and broaden them for the 2026 to 2030 data years – to make sure we assess water company progress towards performance expectations and statutory obligations as set out in our revised WISER (published May 2022)
• continuing to work closely with Ofwat on greater alignment of common performance commitments for 2025 to 2030 (PR24) – seeking to align financial penalty and reward with environmental performance
• working with water companies to learn from the first cycle of DWMPs and alongside other regulators supporting Defra’s development of new guidance for the second cycle of plans – these will ensure water companies can plan and invest in drainage, growth and capacity, climate change and asset health for the next 25 years
• continuing to engage with water companies at chair, executive director and operational levels throughout the year – using the EPA and wider performance data to make it clear what is expected of them
• using planning processes to influence and secure water company investment in environmental enhancement and resilience
• encouraging water companies to work together and share good practice and innovative approaches that will benefit the environment

12. Conclusions

The EPA is a clear, transparent and consistent way to benchmark water companies and their progress with basic statutory requirements. The 2023 EPA results show a small sector improvement in star ratings however the majority of water companies continue to underperform. They are not getting the basics right, such as minimising pollution incidents and achieving permit compliance.

In 2023, 3 water companies achieved our 4 star rating. However, only Severn Trent Water has shown they can achieve this consistently with a fifth year rated 4 stars. Additionally, for several metrics within this EPA period so far (since 2021) some water companies are consistently achieving our targets (green). This shows that they can achieve the expectations on performance. Our concern is the lack of improvement by some companies. All water companies have the ability and duty to perform well. They can all achieve green status for each EPA metric and our industry leading 4 star rating. They need to be getting to this and sustaining their performance.

Pollution incidents remain our greatest concern with all water companies failing to achieve the green target for the total pollution incident metric. This is the first time ever for any metric since the EPA began in 2011. All water companies need to do more and prioritise improvements. Additionally serious pollution incidents have increased due to 4 water companies performing significantly below target (red). Numbers are dominated by Anglian Water, Southern Water and Thames Water, with Yorkshire Water also rated red. These water companies show little or no sign of improvement. They are preventing the sector achieving our performance expectation and their industry commitment to trend to zero serious pollution incidents. However we are pleased that 2 water companies had zero serious pollution incidents in 2023.

The EPA does not cover all water company activities. Recent developments in technology and data availability mean we are working to expand our regulatory activity and our EPA and reporting. We are acting on the poor performance of water companies by transforming our regulatory approach. Last year we set out our plans for a bigger specialised workforce and more data-driven work. Our focus on water will mean a significant uplift in resources. We have secured funding for this through an increase in water quality permit charges. We are committed to carrying out 4,000 inspections a year of water company permitted sites by the end of March 2025. This will rise to 10,000 a year by the end of March 2026 and 11,500 a year by the end of March 2027.

Clearly water companies are not meeting our expectations. We acknowledge their long-term planning and targeted investment. However, water companies need to get the basics right now. They must have robust focused action plans, make use of new data and technology proactively rather than reactively and share good practice across the sector. This should all be based on a company culture that is open and honest with us.

Expectations for high performing water companies remains front and foremost for us as well as the public. The solutions are complex, and with increased data and scrutiny more issues will be highlighted but the environment will benefit.