Consultation on recovering costs for water company enforcement
Environment Agency launches consultation on cost recovery for water company enforcement activities.
Following the introduction of the Water (Special Measures) Act 2025, the Environment Agency is now able to recover additional costs associated with regulating the water industry. This includes the cost of existing and new enforcement activities which were previously funded by government Grant in Aid.
The proposals – set out in a consultation seeking views from the industry, campaigners and members of the public – will see a levy on water companies.
Alan Lovell, Chair 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 increased regulatory powers introduced by this legislation, including cost recovery for our enforcement work, will allow us to close the justice gap, deliver swifter enforcement action and ultimately deter illegal activity.
Alongside these reforms, we are undertaking the biggest ever transformation to the way we regulate the water industry. By investing in people, training and digital assets, we are ensuring water companies better meet the needs of both people and the environment, now and in the future.
The consultation proposes a new levy to raise on certain water discharge activities and is designed to recover costs associated with the Environment Agency’s enforcement work directly from water companies. These cost recovery powers are set out under the Water (Special Measures) Act and all activities will be in line with the Environment Agency’s enforcement and sanctions policy.
The consultation will run until 26 May, and the new charging scheme to be finalised and implemented this summer.
Water Minister Emma Hardy said:
We promised that polluters would pay for the damage they cause to our waterways.
That’s why we’re making sure water companies – not regulators – bear the cost of enforcement action taken in response to their failings.
Through the Water (Special Measures) Act water bosses could face imprisonment for lawbreaking and regulators now have new powers to ban undeserved bonuses and bring automatic and severe penalties against polluters.
Today’s consultation takes us closer to shaping a water sector that delivers real and lasting improvements for customers and the environment as part of our Plan for Change.