Water companies: £11m in water firm fines to be reinvested in local scheme to improve waterways

Water company fines totalling up to £11 million are to be reinvested into schemes that improve waterways and wetlands, the government has announced. The Water Restoration Fund will offer grants to local groups and charities, farmers and landowners to improve rivers, lakes, streams, wetlands and access to nature in England in areas where illegal pollution has occurred.

Funding for the scheme is being provided through fines and penalties imposed on water companies for environmental breaches such as illegal sewage dumping. Water firms have been hit with substantial fines over illegal pollution while recent figures show that sewage was spilled into rivers and the sea for 3.6 million hours last year.

The £11 million in fines and penalties collected for breaching environmental rules will be allocated for schemes in the water company areas in which they were accrued, the Environment Department (Defra) said. These are as follows: Anglian Water, £3,085,000; South West Water, £2,150,000; Thames Water, £3,334,000; United Utilities, £800,000; and Yorkshire Water, £1,600,750.

The Water Restoration Fund has opened for applications. Applicants have eight weeks to apply for the grant funding and awards are expected to be issued from late July.

Initiatives which could gain grants include creating wetlands, boosting wildlife and river habitat, and improving public access to blue and green spaces. Environment Secretary Steve Barclay said: "I know how important our precious waterways are to local communities and to nature, which is why we’re taking tough action to ensure our regulators are well-equipped to hold those who pollute them to account.

"Through the Water Restoration Fund, I will be making sure that money from fines and penalties – taken from water company profits only - is channelled directly back into our waterways. Community-led projects are vital to improving and maintaining water quality across the country, and this fund will help build on that success."

Marian Spain, chief executive of Government nature agency Natural England, welcomed the creation of the fund, calling it a "great opportunity for landowners, communities and nature bodies". Other measures the government has taken include plans to ban bonuses for water company executives where firms have committed serious criminal breaches, and boosting the Environment Agency's capacity to carry out more inspections.

Steven Reed MP, Labour’s Shadow Secretary of State for Environment, Food and Rural Affairs, said the government’s announcement is “a bit late for them to pretend they care”. He said: “The Conservatives have spent 14 years letting water companies pump record levels of raw sewage into our rivers. In the dying days of a failed government, it’s a bit late for them to pretend they care.  

“Labour will put the water companies under tough special measures. That includes making water bosses face criminal charges for illegal sewage dumping, new powers for the regulator to block multi-million pound bonus payments, and severe and automatic fines for every illegal sewage dump."