Stopping sewage spills into UK rivers and seas will mean more expensive water bills to cover costs

Stopping sewage spills into rivers and the sea will require huge infrastructure spending and will push up water bills, according to a new report by the House of Lords committee.

Peers blamed previous governments, regulator Ofwat, and water companies, saying it will be “hugely expensive to put this right."

The root cause of the UK’s sewage problem is that the system was designed and built by the Victorian times and there hasn’t been enough investment to cope with the growing population and intense storms. This has not been contested.

Many see the solution as building a waste water system that manages rainwater and waste water separately, so they no longer go to the same place to be treated. But this updated sewage network could cost from tens of billions to hundreds of billions of pounds over decades.

The cost will almost certainly be passed on to customers, with the Lords report saying a “social tariff” will be needed for those unable to pay the higher rates, but it did not say how much bills could rise.

The committee added that water company bosses should be barred from working in the sector if their firms are responsible for serious pollution incidents and they need to “act fast” to prevent more sewage discharges.

They added that the water regulator and the Environment Agency (EA) must do more to hold polluters to account through penalties and prosecution.

‘Failure to get to grips with the problem’

Last year the government published its Storm Overflows Discharge Reduction Plan, saying it will compel water companies to invest £56 billion over the next 25 years.

Responding to the latest report, the Department for Environment Food and Rural Affairs (Defra) called the investment plan the "largest infrastructure programme" in the water companies’ history.

A spokesperson said: "We know that more needs to be done, which is why we will go further and faster to hold companies to account in delivering for customers and our environment.”

Lord Hollick, chairman of the Industry and Regulators Committee, said there is “an overall feeling of dismay, anguish and anger” about the state of Britain’s waterways and the “apparent failure to get to grips with the problem.”

The committee said water companies have been overly focused on maximising financial returns at the expense of the environment and their bosses should not receive substantial bonuses while their companies are polluting.

‘Act fast before we are all left up sewage creek’

The committee gave the government a host of recommendations which include giving adequate funding to Ofwat and the EA to chase polluters, accelerating the planning process for reservoirs and publishing a National Water Strategy to set out expectations of water quality and resilience of water supplies.

They also said Ofwat should be granted extra powers to prevent directors from working in the sector if their companies are responsible for serious pollution.

The EA’s water and sewage review for 2021 found the environmental performance of water companies to be at its lowest level with most companies’ performance declining.

During the inquiry, the EA said in 20 years the UK will not have enough water to meet demand unless changes are made.

Lord Hollick, chairman of the Industry and Regulators Committee, said: “During our inquiry, we have taken evidence from local communities and activist groups and received a considerable amount of written evidence. We are calling on regulators and the Government to consider our report’s findings and recommendations and act fast before we are all left up sewage creek.”

Ofwat said on Monday (20 March) it wants to block payments to shareholders of water companies if “they would risk the company’s financial resilience”. It said the changes will lower the risk to customers and the environment because of a company’s poor financial health.

An Ofwat spokesman said it “fully intends” to go further in holding water companies to account and is working on its largest enforcement case, with six live investigations into six companies.

He added: “We agree that more spending is needed. At the same time we note that, over the last two years, 14 of the 17 water companies have not spent the funds they have been granted to invest in the network and some have spent less than half.”

Martin Salter, head of policy at the Angling Trust, said Ofwat has “deliberately choked off much-needed investment in replacing leaking pipes and rising sewer mains and increasing capacity at sewage treatment works.”

He added: “They, in part, are responsible for the scandalous lack of any new reservoir building since privatisation in 1989 which is resulting in many of our precious chalk streams and other rivers literally being sucked dry.”

Meanwhile, clean river campaigner Feargal Sharkey said the committee has “just now confirmed formally what any number of people have been trying to tell the government and the regulators – that the whole system has become completely dysfunctional.”