The King’s speech and regulatory body announcements: how will this impact the UK water sector?

Following the recent change of UK Government, water companies are already facing the continuing vigour of political and public focus on their performance.

This article points out the water insights from the King’s speech on 17 July and highlights actions recently taken by the Department of Environment and Rural Affairs (Defra), the Information Commissioner’s Office (ICO) and the Water Services Regulation Authority (Ofwat) that will affect the water sector.

Water insights from the King’s speech

The King’s speech on 17 July announced that the government ‘recognises the need to improve water quality’ and so will be introducing a Water (Special Measures) Bill to strengthen the powers of water regulators.

Defra’s announcement

Defra has recently announced a series of steps to help deliver environmental improvements and wider accountability in the water sector:

• Water companies have agreed to change their legally-binding corporate governance documents, their articles of association, to make the interests of customers and the environment a primary objective.
• Consumers will gain new legal powers are being proposed to create customer panels that are designed to hold water companies to account through powerful new customer panels.
• Strengthen protection and compensation for households and businesses will be available when their basic water services are affected. Subject to consultation, the amount of compensation water customers are legally entitled to when key performance standards are not met could more than double. The payments could also be triggered by a wider set of circumstances including boil water notices.

Further involvement of the Information Commissioner’s Office

The ICO has written to water companies to clarify that they cannot use the ongoing investigation into wastewater treatment works as a reason to withhold data from the public on sewage spills. 

Water companies in England, Wales and Northern Ireland are required to respond to requests for information from the public under the Environmental Information Regulations 2004.

The ICO has written to 12 water companies to remind them that the Environmental Information Regulations 2004 requires them to ‘both respond to requests for environmental information and to progressively make information available to the public proactively’.

In the letter, UK information commissioner John Edwards highlighted to companies the result of a recent First-tier Tribunal case, Stephen Lavelle v The Information Commissioner and Ors. In this case, Northumbrian Water tried to withhold information over sewage spills on the basis that it could prejudice an investigation currently being carried out by Ofwat and the Environment Agency into more than 2,000 wastewater treatment works in England.
 
Edwards said this case made clear that ‘simply because the information requested is directly relevant to an ongoing investigation, does not mean that disclosure would necessarily have an adverse effect on the course of justice’. 

The ICO reported that it had issued decision notices to six water companies in May 2024 requiring disclosure of start and stop times of discharges, despite the ongoing investigation.

In addition to providing ‘timely and appropriate responses’ to Environmental Information Regulations requests, the ICO’s position is that water companies should ‘proactively’ disclose information on sewage discharges on a regular, monthly basis. According to the ICO, this would not only see the information provided to the public ‘more quickly and easily’, but would also be ‘more cost effective and efficient than dealing with the alternative of numerous responses to individual requests for the information’. Water companies have been asked to respond to the ICO to confirm they will publish more information.

Ofwat announcement

Ofwat has recently announced that it is carrying out enforcement activities at every wastewater company in England and Wales, after serving formal notices on four additional utilities firms. 

The action forms part of Ofwat’s ongoing investigation into how utilities companies manage their wastewater treatment works and networks. The investigation was launched in November 2021, alongside a similar investigation by the Environment Agency. 

Ofwat confirmed that this announcement means it now has enforcement activities underway against all 11 water and wastewater companies in England and Wales. This is the largest and most complex investigation Ofwat has undertaken. Opening an enforcement case does not necessarily mean the company has breached its legal obligations. 

Ofwat’s enforcement powers can see the regulator fine companies up to 10% of their relevant annual turnover.

Ofwat has recently approved, subject to consultation, a £88bn expenditure by water companies for the period 2025 to 2030 in its recently published draft determinations. 

For further information, please contact the energy and resource management team.