Ofwat has today confirmed its final decisions in its wastewater investigations against Anglian Water and South West Water - a total of £86.8 million will be paid by the companies as enforcement packages.

The decision follows findings that both companies breached their legal obligations in operating their wastewater treatment works and networks.Ofwat said that in stepping up to acknowledge what has gone wrong and how they will put things right, Anglian Water and its shareholders will fund a total enforcement package of £62.8 million, and South West Water will fund an enforcement package of £24 million.

The outcomes follow two separate public consultations on the draft decisions, published on 29 July and 10 July respectively. The packages are in addition to the investment that the companies will need to make to remedy breaches Ofwat's investigations found in order to ensure their future compliance.

The regulator’s investigations found that both companies failed to operate, maintain and upgrade their wastewater assets adequately to ensure they could cope with the flows of sewage and wastewater coming to them. The companies failed to have in place adequate processes and oversight by their senior management and Board to ensure assets were performing adequately and that they were meeting the legal requirements expected of them.

With the conclusion of these cases, Ofwat has now closed five wastewater investigations in 2025 which has resulted in enforcement action worth more than £240m.

Lynn Parker, Senior Director for Enforcement at Ofwat, said:

“Our investigations found failures in how Anglian Water and South West Water have operated and maintained their sewage works and networks, which has resulted in excessive spills from storm overflows. These are serious breaches and are unacceptable.

“We understand that the public wants to see transformative change. That is why we are prioritising this sector-wide investigation which is holding wastewater companies to account for identified failures. We are pleased both companies have accepted that they got things wrong and are now focusing on putting that right and taking action to come back into compliance. We expect all companies to do the same so that customers can regain confidence in their water company and the critical service they provide.”

Ofwat can impose financial penalties of up to 10% of a company's relevant turnover. In deciding whether to impose a penalty and the level of that penalty,

If the enforcement packages not been agreed, a penalty would have been applied where the money would have been returned to the Consolidated Fund operated by HM Treasury.

The £62.8 million enforcement package Ofwat has secured with Anglian Water is greater than if a penalty had otherwise been imposed on the company (which would have been £57.1 million, 6.5% of Anglian Water’s annual turnover). The enforcement package includes:

• Creating a £5.8 million community fund that will support projects delivering environmental and social benefits for local communities, with a particular focus on restitution of the water environment.
• Investing £57 million in developing and delivering ‘Excess Flow Management Plans’, to remove, attenuate or optimise wastewater flows in at least eight catchments in its region to provide local environmental improvements.
• Accelerating delivery of investment which the company had already planned for 2025-30 through its Storm Overflows Discharge Reduction Plan. This includes earlier delivery of 36 storm tanks, 45 screens and 42 other deliverables.

In addition, the company will develop and deliver a remediation and compliance plan to ensure that all its storm overflows are compliant with the legal requirements considered by Ofwat’s investigation.

The £24 million enforcement package Ofwat has secured with South West Water is greater than the penalty it would otherwise have imposed on the company (which would have been £19 million, 6.5% of South West Water’s annual turnover). The enforcement package includes:

• Investing £20 million during 2025-30 to reduce spills from specific storm overflows. This investment will target overflows in environmentally sensitive areas or within focused community areas.
• Establishing a £2 million local fund to tackle sewer misuse and misconnections, which can contribute to environmental pollution.
• Providing £2 million of funding through a Nature Recovery Fund to support environmental groups in delivering local environmental improvements.

Instead, the money from both will remain in the water sector and be spent on making improvements to service for the benefit of Anglian Water and South West Water customers and the local environment.

Following the publication of the Independent Water Commission final report, the UK government has set out a new direction for the water sector with the formation of a new regulator in England. The new body will combine Ofwat with the Drinking Water Inspectorate and include elements of the Environment Agency and Natural England.