Last month (June 2024) brought into force a new water quality charging scheme across England: The Environment Agency Environmental Permitting and Abstraction Licensing) (England) Charging Scheme 2022 version 1.3. The aim of the Scheme is to tackle prolific breaches of environment laws by the UK’s wastewater industry.
This new Charging Scheme is an update by one of the water and sewage companies’ regulators: the Environment Agency (EA). The EA work with water companies to ensure that they are closely monitoring and reporting back on their discharge activity. The EA last updated the charging scheme six years ago. Now, owing to government pressure on regulatory bodies to clamp down on illegal sewage management, the new Charging Scheme brings significant increases of up to up to 547%for the price of permits (that will allow statutory sewage undertakers to make particular waste and sewage discharges into seas and rivers).
Yet the new Charging Scheme is just one way the EA are ‘rebooting’ their long-held regulatory position. From 18 Nov 2021, the EA and the wastewater economic regulator, The Water Services Regulation Authority (OFWAT), have been carrying out a criminal investigation into non-compliant sewage dumping by wastewater companies. It is the EA’s largestcriminal investigation into potential widespread breaches of environmental permit conditions, as it is examining thetreatment works of all UK-based water and sewerage companies.
This article looks at why the EA and OFWAT are coming down hard on wastewater companies, and the impact that the Charging Scheme will have on consumers.
Why are wastewater regulators suddenly upping their ante with water and sewage companies?
UK water services were privatised in 1989 by Margaret Thatcher’s government. However, the water and sewage companies of the UK have been in breach of their permit conditions for a while.
In 2021, Thames Water was fined £4 million for discharging an estimated half-a-million litres of raw sewage in 2016 into streams near residents’ homes, killing around 3,000 fish. The judge imposing the fine called it “disgraceful.”
The summer of 2022 was marred by the exposure of our sewage-filled beaches, with the mainstream media publishing overdue headlines on the matter, and revealing regular illegal dumping of raw sewage in rivers.
Yet since the ‘outing’ of the UK wastewater companies’ illegal behaviour by the mainstream media, the situation has worsened. During 2023, the frequency of raw sewage spills more than doubled The EA reported that in 2023, water companies spent 3.6 million hours committing sewage spills, compared with 1.75 million hours in 2022.
Furthermore, in September 2023, the BBC confirmed sewage companies had been committing illegal dry raw sewage spills during 2022, as suspected. Raw sewage spills are only permitted during high levels of rainfall. The dry spills were confirmed by the BBC cross-referencing spill data that had been sent to the EA by the UK’s nine sewage companies during 2022 with the volume of rainwater over the same period. The results suggest that dry spills were activated on over 200 days in 2022, with the spills lasting over 29,000 hours. The BBC also note that some dry spills occurred during the record summer heatwave when people were cooling off in England's rivers and seas.
Further still, in April 2024, The Guardian provided a platform for whistleblowers within the wastewater company to share their experiences. The overwhelming conclusion was that many companies across the UK are regularly failing to treat the minimum amount of sewage required to meet their environmental permits. One whistleblower reported that, in some companies, diversion pipes had been purposefully installed to divert raw sewage before it has arrived at the treatment plant. Some of this raw sewage was instead, being sent straight to ‘environmentally sensitive’ areas. It should be noted that sewage companies across the UK are permitted to release a certain amount of untreated sewage into rivers and seas during periods of high rainfall (these intentional spills being known as storm overflow discharges). This is to avoid ‘back up’ flooding into homes. However, diverting the sewage before it arrives at the treatment plant is illegal. Further, the whistleblowers confirmed that this bypassing of raw sewage has not been happening on the sly. It was reported that within some companies, the ‘chain of command’ authorised this practice. Many UK water companies have therefore been purposefully breaching their environmental duties for years.
This is where the Charging Scheme comes into play
In August 2022 the Conservative government announced their Storm Overflow Discharge Reduction Plan for tacklingstorm overflow discharges. As part of the plan, water companies are required to deliver their largest ever environmental infrastructure investment, with an expected £60 billion of capital investment over 25 years.
A key component to every stage of the plan is increased spending or financial sanctions for the UK’s water companies. For example, polluters now face unlimited penalties, with the money being re-invested into a new Water Restoration Fund. The Fund is being used to enhance the ‘water environment in specified geographical areas.’
Further, in October 2023, the industry trade group, Water UK, announced plans on behalf of its members to almost double spending to pay for upgrades and cut sewage discharges. This Water UK plan will see water companies invest £11bn to reduce sewage spills by 2030. Water UK described this plan as the "most ambitious modernisation of sewers since the Victorian era". They have also admitted the need for sudden change: 'We know as an industry that we have not given the issue of sewage spills the attention we should have, and for that, we are sorry. We understand why people are upset and they are right to be so. We’ve heard those concerns and set out to do better. While it will take time to overhaul 100,000km of old sewers, we have a plan to dramatically cut the number of sewage spills.'
It therefore seems that the Charging Scheme that came into force last month is part of the government’s overall Storm Overflow Discharge Reduction Plan. At the beginning of 2024, the EA held a consultation on the Charging Scheme that came into force last month. Within this consultation, the EA described the price hikes for permits as necessary, owing to the government asking of the EA to ‘urgently increase’ their ‘regulatory activity across the water industry’ to clamp down on pollution and improve water quality. They released the following statements in their consultation paper on the new Charging Scheme:
'The government has set a strong direction for us to urgently increase our level of regulatory activity across the water industry, to help reduce pollution incidents and drive improvements to water quality. Statutory sewerage undertakers have been underperforming for some time in respect of their environmental measures.” […] “HM Treasury guidance requires us to take a fair and proportionate approach to achieve full cost recovery for the additional regulatory activity required to address this'.
'Pollution from intermittent discharges of storm sewage and emergency sewage discharges by sewerage undertakers is a matter of growing public concern that continues to receive high profile attention. Our charges will fund increased levels of regulatory activity to allow for greater scrutiny and transparency around when and where such discharges take place, and how they affect the environment'.
Other recent increases in cost for statutory sewage undertakers were also justified by the EA, this time owing to ‘growing public concern’. Attention in the media over the scandal of sewage-ridden UK beaches in 2022 saw subsistence charges for storm sewage discharge increase by 102% and 209% for emergency sewage discharges.
What will the Charging Scheme lead to?
An important caveat to the upgrades is an increase in customer bills by £156 a year. This will not be a temporary increase; the public will be paying for the storm overflow upgrades for years. This is because, every household water bill includes a sewerage charge (unless your waste water does not drain into a public sewer). The charge is for wastewater to be taken from your building to the sewerage treatment plant. However, as the investigations and whistleblowing revealed, the wastewater that households have been paying for, has not always reached the treatment plants. Nor has it always been processed properly. Therefore, under the new plan, which includes the Charging Scheme, the UK public will be paying more for their sewerage charge. Arguably, the public should be receiving a refund for the overpayments made to water companies who have not been properly carrying out their jobs.
Is there an alternative to high charges for water companies?
Considering the urgency with which the government, and regulatory bodies, must move to tackle the sewage scandal, it seems unlikely that an alternative to high fees for statutory sewage undertakers is available.
However, whilst it is arguably inevitable that water companies will face higher charges to remedy their behaviour, said companies must not be allowed to increase their consumer bills to make up for their illegal behaviour. Placing the burden of the cost on the public to make up for the consistent failings of both the water companies and regulatory bodies is unacceptable.
It must be acknowledged that OFWAT will be preventing under-performing water companies from turning to consumers to foot the bill. Further, OFWAT are currently looking into banning water company bosses from receiving bonuses if a company has committed serious criminal breaches. However, emphasis should be placed on the fact that only under-performing companies will be prevented from increasing bills for consumers. This is insufficient, considering that it is every wastewater company across the UK that has been involved in non-compliance with regulations, and whose actions have caused the increased price for permits. No consumer should be required to pay more for sewerage disposal. It is the responsibility of the privatised wastewater companies.
To identify sewage spills in your local river, visit The Rivers Trust Map.
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