Regulators Report: England's Water Companies Show Worsening Environmental Performance

Based on reporting by BBC UK:

According to the first joint report released by the regulators, the environmental performance of water companies deteriorated in the past year, even with industry investment. The report stated that eight out of the nine companies in England received a rating of "poor" or "requiring improvement," with Severn Trent being the sole recipient of the highest rating, and that the number of complaints made by households about water companies to the Consumer Council for Water (CCW) increased by 84% in a year - the highest in 20 years. Serious pollution entering the environment was identified as a "major concern."

Alan Lovell, the chair of the environmental regulator, stated that the findings demonstrated the industry was still not meeting the standards expected by both the public and the regulators. Environment Secretary Dame Angela Eagle expressed her intention to hold failing companies accountable and to highlight the most significant offenses across the country.

Four different regulators—the Environment Agency (EA), Natural Resources Wales (NRW), Ofwat, and the Drinking Water Inspectorate—collaborated on this assessment, marking the first time they have jointly evaluated the sector. The Environment Agency noted that serious pollution incidents in 2025 were a "major concern," and that these levels remained similar to those observed in the previous five years, despite £5bn invested over that period. Overall, England's water companies were awarded 16 out of a possible 36 stars for environmental performance, which the EA described as the worst total on record. The EA attributed this outcome to both declining performance in certain areas and the implementation of tighter performance standards.

In Wales, NRW assigned Dŵr Cymru Welsh Water a two-star rating out of four. Water UK, an industry body, conceded that the environmental performance of some water companies was insufficient, but it also pointed out that over half of all pollution incidents resulted from "blockages or vandalism, which are not in the direct control of the water companies."

Water companies have pledged record investment through 2030 to upgrade their sewage treatment works and networks. However, customer bills are projected to increase by an average of 36% between 2025 and 2030 as a consequence. Despite this, Alan Lovell from the EA noted that not all companies had fulfilled the environmental improvement schemes for which they received funding.

Furthermore, the number of complaints lodged by households regarding water companies with the Consumer Council for Water (CCW) increased by 84% in one year, representing the highest figure in two decades. Mike Keil, chief executive of the CCW, mentioned that many customers have not perceived any improvement in customer service or performance despite recent increases in bills, noting that while people support investment, bill payers are questioning the value of their expenditure.

Regarding water usage, household consumption in England and Wales in 2025 remained consistent with the previous year at 137 litres per person per day, and water consumption has not decreased, which risks future supplies. The government is planning to introduce new legislation next year to reform the industry's structure and regulation, which includes merging the regulators in England. Additionally, Prime Minister Andy Burnham announced at his Labour conference that a strengthened Water Bill would remove limits on government ownership of shares in England's major water companies.