Sewage overflows are a Victorian infrastructure issue and it was a Conservative Government that was the first to take action on this by publishing the Storm Overflows Discharge Reduction Plan. This will require water companies to deliver their largest ever environmental infrastructure investment - £56 billion capital investment over 25 years.
Water companies will have to achieve a number of strict targets. These targets will mean that water companies need to take measures such as increasing the capacity of their networks and treating sewage before it is discharged to protect public health and prevent pollution, while massively reducing all discharges. By 2035 water companies will have to improve all storm overflows discharging into or near every designated bathing water and improve 75 per cent of overflows discharging to high priority nature sites. By 2050, this will apply to all remaining storm overflows covered by our targets, regardless of location. This plan will be reviewed by ministers in 2027 to consider where we can go further, taking account of innovation and efficiencies.
This strikes the right balance between the need for investment and the impact on consumers. Options, which could add up to £817 a year to average household water bills, have been ruled out and ministers will continue to monitor water affordability and will consult on a new water affordability scheme to help less well-off households.
Additionally, the plan sets out that water companies will be required to publish discharge information in near real time as well as committing to tackling the root causes of the issue by improving surface water drainage. The plan also sets out wider expectations for the water industry to ensure their infrastructure keeps pace with increasing external pressures, such as urban growth and climate change and to ensure our water supplies remain clean and secure for the future.
The Government has further been clear that companies cannot profit from environmental damage. Ofwat has outlined that water companies must be transparent about how executive pay and dividends align to delivery of services to customers, including environmental performance. The Government supports Ofwat’s recent proposals, which would provide extra powers for enforcement action against companies that do not link dividend payments to their environmental performance, or who failed to be transparent about their dividend pay-outs.
The privatisation of the water sector has delivered around £170 billion of investment through private finance and this country would not have seen this level of investment if the water industry were in public ownership. This has delivered a range of benefits to customers and the environment, including world-class drinking water, excellently classed beaches and improved customer satisfaction, as well as two-thirds reduction in leakage.
Ministers will continue to utilise the strong regulatory environment to push companies to ensure they invest and continue to deliver on the public’s priorities.