BBC Business reporter Lucy Hooker reports that water company executives in England and Wales now face harsher penalties for breaking the law. Under new powers, bosses who impede investigations into sewage spills can be sentenced to up to two years in prison. This move is intended to serve as a strong deterrent, according to government officials.
Simultaneously, a scathing report from the National Audit Office criticizes the government and regulators for their failure to effectively manage risk and drive investment in the water sector. This lack of oversight has resulted in higher costs for consumers, with trust in the industry at an all-time low. The report places blame on regulatory bodies, such as Ofwat and the Environment Agency, as well as on the Department for Environment, Food and Rural Affairs (Defra), for their inability to enact necessary improvements.
In recent years, water companies have faced scrutiny for their role in increased sewage spills that have polluted waterways. Critics point out that these companies have prioritized profits for shareholders and bonuses for executives over investing in infrastructure to accommodate population growth and extreme weather conditions. Despite this, responsibility ultimately falls on Defra and regulators for setting the parameters within which water companies operate.
Campaign group River Action has welcomed the new enforcement measures but emphasizes that their effectiveness will hinge on actual implementation. Chief executive James Wallace stresses the need for tangible penalties, not just symbolic gestures. He asserts that consumers are bearing the brunt of regulatory failures and corporate greed, calling for an end to the current privatization model
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