The environmental performance of water companies in England has declined further, with only one firm earning the highest rating from regulators in a first-ever joint assessment, according to a report.
Eight of the nine water companies in England were rated as "poor" or "requiring improvement", with Severn Trent the only company to receive the top rating. The report, the first joint effort by the Environment Agency, Natural Resources Wales, Ofwat and the Drinking Water Inspectorate, praised companies for reducing service disruptions but said serious pollution incidents remained a "major concern".
The chair of the Environment Agency, Alan Lovell, said the results "expose the scale of underperformance across the sector" and that despite investing £5bn over the last five years, "not all companies have delivered the environmental improvement schemes they have been funded for". Lovell also said the industry continued to "fall well short of the standards rightly demanded by both us and the public". The report comes as the government has committed to merging the four regulators into a single body to streamline regulation.
Analysis
Why This Matters
- Water quality and pollution affect public health and the environment; the report shows that despite billions in investment, companies are failing to meet standards.
- The joint assessment signals a tougher regulatory approach and may lead to stronger enforcement or restructuring of the industry.
- The government's plan to merge regulators could change how water companies are held accountable.
Background
Water companies in England and Wales are privately owned but heavily regulated. The sector has faced criticism over sewage discharges and environmental damage, prompting a government pledge to create a single regulator. The first joint report by the four existing regulators provides a comprehensive view of performance across the industry.
What to Watch
- Whether the government follows through on merging the four regulators into a single body.
- Any further regulatory penalties or enforcement actions against the poorly rated companies.
- Reactions from water companies to the report and their plans to address environmental shortfalls.
Checked
12 claims in this story checked against 1 source: 11 supported.
Show each claim
- SupportedWater companies' environmental performance deteriorated further.BBC News: “The environmental performance of water companies fell again last year despite industry investment”
- SupportedEight of nine companies were rated “poor” or “requiring improvement”, and Severn Trent alone received the highest rating.BBC News: “Eight of the nine companies in England were rated as "poor" or "requiring improvement", with only Severn Trent receiving the highest rating.”
- SupportedThis was the regulators’ first joint assessment of the industry.BBC News: “this marks the first time they have come together to assess the industry.”
- SupportedThe Environment Agency chair said the results “expose the scale of underperformance across the sector”.BBC News: “Alan Lovell, chair of the EA, said the "results expose the scale of underperformance across the sector".”
- SupportedLovell said that “not all companies have delivered the environmental improvement schemes they have been funded for”.BBC News: “Despite investing £5bn over the last five years, Lovell said "not all companies have delivered the environmental improvement schemes they have been funded for".”
- SupportedLovell said the industry continued to “fall well short of the standards rightly demanded by both us and the public”.BBC News: “The chair of the environmental regulator said the results showed the industry continued to "fall well short of the standards rightly demanded by both us and the public".”
- Partly supportedThe report said serious pollution incidents remained a “major concern”.BBC News: “Serious pollution incidents in 2025 were a "major concern" the Environment Agency said, and remained at similarly high levels seen in previous years.”
- SupportedCompanies were praised for reducing service disruptions.BBC News: “Companies were praised for reducing service disruptions”
- SupportedAlan Lovell is the chair of the Environment Agency.BBC News: “Alan Lovell, chair of the EA, said”
- SupportedLovell referred to £5bn invested over the last five years.BBC News: “Despite investing £5bn over the last five years, Lovell said”
- SupportedThe first joint assessment involved the Environment Agency, Natural Resources Wales, Ofwat and the Drinking Water Inspectorate.BBC News: “Four different regulators currently oversee water companies in England and Wales - the Environment Agency (EA), Natural Resources Wales, Ofwat and the Drinking Water Inspectorate - and this marks the first time they have come together to assess the industry.”
- SupportedThe government has committed to merging the four regulators into a single body to streamline regulation.BBC News: “It is a nod to the commitment which Sir Keir Starmer's government made to merge the organisations into a single body as part of efforts to streamline regulation.”