New powers under the Government’s landmark Water (Special Measures) Act 2025 have come into force today which could see water company bosses who cover up or hide illegal sewage spills face up to two years in prison.

According to a government announcement, no prison sentences have been handed to water executives since privatisation despite widespread illegal sewage discharges into rivers, lakes and seas. As part of the Government’s Plan for Change, the threat of imprisonment will act as a powerful deterrent as water companies invest in upgrading broken water infrastructure.

The new, tougher penalties are seen as essential because some water companies have obstructed investigations, failing to hand over vital evidence related to illegal sewage discharges which has prevented crackdowns against law-breaking water companies.

Environment Secretary Steve Reed said:

“Bosses must face consequences if they commit crimes. There must be accountability.

“From today, there will be no more hiding places.

“As part of the Plan for Change, water companies must now focus on cleaning up our rivers, lakes and seas for good.”

In addition, new powers also will mean that the polluters will pay for the cost of criminal investigations into wrongdoing. Authorities will now recover the costs of their enforcement activity, with the Environment Agency currently consulting on how they will use the powers.

The payment of bonuses to water bosses will also be banned if they fail to meet high standards to protect the environment, their consumers, and their company’s finances.

Philip Duffy, Chief Executive of the Environment Agency said:

“The Water (Special Measures) Act was a crucial step in making sure water companies take full responsibility for their impact on the environment.

“The tougher powers we have gained though this legislation will allow us, as the regulator, to close the justice gap, deliver swifter enforcement action and ultimately deter illegal activity.

“Alongside this, we’re modernising and expanding our approach to water company inspections - and it’s working. More people, powers, better data and inspections are yielding vital evidence so that we can reduce sewage pollution, hold water companies to account and protect the environment.”

Criminal liability - since privatisation only three water company officials have been criminally prosecuted for obstruction

Until now, water regulators have faced significant challenges gathering evidence for prosecutions due to obstruction of their investigations.

This is a criminal offence, but since privatisation, only three water company officials have been criminally prosecuted for obstruction by the EA without appeal and the maximum punishment was merely a fine – though no fines were issued.

From now on, offences will be triable in both the Crown and Magistrates’ Courts and imprisonment will act as a powerful deterrent, bringing water regulation powers in line with other sectors, such as those covering fraud or health and safety investigations.

The new provisions enable:

• courts to include imprisonment as a sanction when investigations by water regulators (the Environment Agency, Natural Resources Wales and the Drinking Water Inspectorate) have been obstructed;
• obstruction offences to be heard in the Crown Court;
• directors and executives to be prosecuted where obstruction occurs with their consent, connivance or neglect.

Previously:

• obstructing regulators’ investigations was not always punishable by imprisonment;
• cases could not always be heard in the Crown Court;
• there were no straightforward routes for prosecuting directors or executives where obstruction was committed with their consent or connivance, or was attributable to their neglect.   

The new measures are seen as delivering on the Government’s promise to bring tougher criminal charges against lawbreakers in the water industry.