Overview

The Water (Special Measures) Bill aims to improve the governance, regulation, and special administration of water companies in England and Wales. It introduces stricter rules on executive pay, mandates pollution reduction plans, enhances transparency around sewage discharges, and strengthens enforcement mechanisms.

Description

Governance and Remuneration

The bill amends the Water Industry Act 1991 to grant Ofwat (the water services regulator) the power to set rules on water company directors' pay and governance. These rules will prevent performance-related pay if companies fail to meet specified environmental, consumer, and financial standards. It also requires consumer involvement in key decisions.

Pollution and Environmental Protections

The bill requires water companies to create and publish annual pollution incident reduction plans, including implementation reports detailing successes and failures. It also mandates the reporting of discharges from emergency overflows within an hour of their start and end. Finally, it requires Ofwat to consider climate change and environmental targets in its decision-making and mandates the inclusion of nature-based solutions in drainage and sewerage plans.

Enforcement and Sanctions

The bill increases penalties for impeding investigations by environmental regulators, including jail time for company executives. It also allows for the use of a lower standard of proof ("balance of probabilities") for imposing civil penalties on water companies for certain offences. It introduces automatic fixed monetary penalties for specified offences unless exceptional circumstances exist or alternative actions are underway.

Special Administration Orders

The bill grants the Secretary of State and Welsh Ministers powers to modify water company appointment conditions to recover losses incurred through special administration orders (SAOs). This involves allowing them to adjust charges to recover funds, with procedural requirements for consultation and public notification.

Government Spending

The bill doesn't directly specify additional government spending figures. However, it could lead to increased costs for the Environment Agency and Natural Resources Body for Wales due to new enforcement functions and the potential recovery of SAO losses through water company charges.

Groups Affected

• Water Companies: Subject to new regulations on pay, governance, pollution reduction, reporting, and potential increased charges.
• Ofwat: Granted increased powers to regulate water companies.
• Environment Agency and Natural Resources Body for Wales: Given new enforcement powers and potential for increased workload and costs.
• Consumers: May see changes in water bills, potentially increased transparency and more influence on water company decisions.
• Environmental groups: Potentially benefit from stronger environmental protections and increased transparency.

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