Faster penalties as part of water system overhaul

The Environment Agency’s powers will continue to be strengthened as part of the Government’s overhaul of the water system with water companies now facing higher fines of up to £500,000.

The changes come as part of the Water (Special Measures) Act 2025 which aims to hold water companies accountable, boost protections for consumers, and improve transparency between companies and the Environment Agency.

The Environment Agency’s ability to impose penalties will no longer be limited by the criminal standard of proof which made penalties difficult to pursue. The regulator will soon be able to use the civil standard of proof which should make it easier for it to investigate breaches and impose proportionate fines.

The regulator will also be able to conduct ‘no notice’ inspections as part of its increased inspection powers. A new Chief Engineer role will be introduced to ensure adequate oversight.

Automatic penalties will be introduced for clear/non-disputed breaches. An automatic penalty will result in a £10,000 fine payable within 28 days. If a company fails to pay before the end of the 28-day period, the fine will double.

It is predicted that the overhaul will cost the water sector between £50 and 67 million a year.