Here, we set out answers to why Ofwat is investigating, what, how, and by when.
- Why are you investigating?
- What is Ofwat investigating?
- How are you doing it?
- When will you have finished?
Why are you investigating?
New monitoring equipment, which is currently being installed at over 2,200 wastewater treatment works in England has prompted several water companies to say that they could be releasing sewage from their wastewater treatment works when they do not have permission to do so.
Wastewater treatment works have environmental permits that set out conditions that include how the company must treat wastewater before any discharges can be made from the treatment works into the environment. These permits are issued by the Environment Agency.
All wastewater treatment works are built to be able to deal with a certain amount of wastewater, calculated depending on the area they serve. Our investigation currently centres on something called Flow to Full Treatment, referred to as FFT for short. FFT is a measure of how much wastewater a treatment works must be able to treat at any time.
Many wastewater treatment works have a requirement in their environmental permit about the FFT level they must work to. If the amount of wastewater going to the works is more than that FFT level, for example if there is a storm and heavy rain, then the environmental permit for the treatment works will normally allow the extra flows to be diverted to storm tanks (where the works has them), until the storm passes. The contents of these storm tanks can then be returned to be treated by the works.
If the storm is prolonged or sustained, then the environmental permit will allow the water company to release the extra incoming rainwater and diluted wastewater into the environment, normally after partial treatment by settlement by storm tanks or through storm overflows into a river or sea.
New information that some water companies have shared with the Environment Agency suggests that water companies may not have been treating the amount of wastewater they should do before diverting it to storm tanks and/or discharging it to the environment. If this is the case they will have broken the conditions of their environmental permits.
What is Ofwat investigating?
The current focus of our investigation is to understand if and how often water companies are breaking the conditions of their environmental permits at their wastewater treatment works.
We do not have a role in monitoring or enforcing individual environmental permits, that is a matter for the Environment Agency. But Ofwat may have a role if a water company is breaking the rules of its environmental permits so often and in such a way that it suggests that the water company might be breaking other legal requirements that a water company has, and that Ofwat is responsible for enforcing. These include requirements water companies have about how, overall, they operate, manage and report on their performance, including of their wastewater treatment works.
Ofwat assesses and agrees the amounts of money water companies can recover from their customers to ensure they can meet all of their legal obligations, and we have an important role in setting out how we expect water companies to deliver for their customers, society and the environment. If companies are not meeting their legal obligations or our policy expectations we want to understand why and how they are putting that right.
This includes how they are working with their customers and stakeholders to share details about the water company’s performance and to listen to and address concerns they might have. It also includes how the water company’s environmental record is factored into their decisions about paying out dividends or executive pay and bonuses.
How are you doing it?
The first step in our investigation was to gather further information from the water companies to better understand what they are and aren’t doing.
On 18 November 2021, we wrote to all water and wastewater companies in England and Wales requesting that they provide a range of information to us. This included:
- Providing full disclosure about the number of wastewater treatment works the company has that might not be meeting the FFT requirements of their environmental permits, and an estimate of the discharges to the environment this might have caused;
- Explaining the reasons why, if this is happening;
- Explaining how the water company manages its wastewater treatment works to ensure they meet the FFT requirements of their environmental permits;
- Setting out what role their board plays in ensuring that the company is meeting its FFT requirements;
- Describing how the company’s board considers the company’s environmental performance when making its decisions about the dividends and executive pay and bonuses the company pays out; and
- Setting out their plans and timelines to put right any problems uncovered.
The responses we received from companies are helping us to start to build a better picture of the potential number of wastewater treatment works that may not be meeting the FFT requirements of their environmental permits; the possible causes of this; and more generally how companies go about managing their wastewater treatment works to ensure they meet their environmental obligations. The responses also set out what companies are already doing to put right the problems they have reported at their wastewater treatment works. You can find a summary of what companies told us.
We are continuing to assess the information we received from all water and wastewater companies. In addition we have issued notices to five companies to gather further information for enforcement purposes. This will help us to further deepen our understanding of how they are managing their wastewater treatment works.
When will you have finished?
This investigation is a priority for Ofwat and we are working as quickly as we can to progress it. We completed our initial assessment of the issue at the end of February 2022, helping us to identify a priority set of companies we have opened enforcement cases into. We are now gathering further information from them due to our concerns with the initial information they provided to us. We will keep our enforcement cases under review, and the companies which are our focus may change as we gather new information.
You can find out more information about the steps we go through when doing an enforcement case.
Where we can, as we proceed and reach key milestones, we will provide updates at ‘latest updates’ on our website. As ever with investigations of this type, our timetable may change depending on what we uncover; whether we need to gather further information; and the next steps we decide to take.
Some information will stay private for longer, because publishing it may hinder us or the Environment Agency from taking enforcement action, which could lead to fines for companies, criminal prosecutions or effective remedies packages.