Serious pollution by water industry remains high despite £5bn investment, say regulators

The environmental performance of water companies fell again last year despite industry investment, according to the first joint report by the regulators into water companies.

Eight of the nine companies in England were rated as “poor” or “requiring improvement”, with only Severn Trent receiving the highest rating.

Companies were praised for reducing service disruptions but serious pollution into the environment remained a “major concern”.

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”.

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.

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.

But it is on environmental performance that the report is most critical – and damning.

Serious pollution incidents in 2025 were a “major concern” the Environment Agency said, and remained at similarly high levels seen in previous years.

Alan Lovell, chair of the EA, said the “results expose the scale of underperformance across the sector”.

Despite investing £5bn over the last five years, Lovell said “not all companies have delivered the environmental improvement schemes they have been funded for”.