Water (Special Measures) Act 2025
The Water Industry Act 1991 is amended as follows.
For the italic heading before section 35A substitute “Remuneration and governance”.
After section 35A insert—
Rules issued for the purposes of section 35B(2)(a) of the Water Industry Act 1991 (as inserted by subsection (3)) may make provision about performance-related pay in respect of the financial year beginning 1 April 2024 (and subsequent financial years).
The first rules under section 35B of the Water Industry Act 1991 (inserted by subsection (3)) may not be issued unless—
the rules have been provided in draft to the Secretary of State, and
the period of 7 days beginning with the day on which the draft was provided has elapsed.
In the Water Industry Act 1991, after section 35D (inserted by section 1) insert—
After section 205 of the Water Industry Act 1991 insert—
The Water Industry Act 1991 is amended as follows.
In Part 4 (sewerage services), after Chapter 4 (storm overflows) insert—
In section 213 (power to make regulations), in subsection (1) for “or 141DB” substitute “, 141DB or 141F”.
In section 94A(3) of the Water Industry Act 1991 (matters to be addressed in drainage and sewerage management plans), after paragraph (e) insert—.
In section 110 of the Environment Act 1995 (offences of impeding investigation by environmental regulator)—
after subsection (3C) insert—;
in subsection (4), after “above” insert “(except one to which subsection (3E) applies)”;
in subsection (5), after “above” insert “(except one to which subsection (3E) applies)”;
after subsection (5H) insert—
In section 86(6) of the Water Industry Act 1991 (offences of impeding investigation by drinking water inspector)—
after “fails” insert “without reasonable excuse”;
for the words from “on summary conviction” to the end substitute —
The amendments made by this section have effect only in relation to offences committed on or after the day on which this section comes into force.
This section is about the powers to provide for fixed monetary penalties or variable monetary penalties conferred by sections 36 and 62 of the Regulatory Enforcement and Sanctions Act 2008 (“the 2008 Act”).
In relation to an offence within subsection (3) that is committed by a water company, the powers may be exercised as if “on the balance of probabilities” appeared instead of “beyond reasonable doubt” in sections 39(2) and 42(2) of the 2008 Act.
The offences are those under—
any of the following provisions of the Water Resources Act 1991—
section 24(4) (unlicensed abstraction or related works or contravening abstraction licence);
section 25(2) (unlicensed impounding works or contravening impounding licence);
section 25C(1) (contravening abstraction or impounding enforcement notice);
section 80 (contravening drought order or permit);
section 201(3) (contravening water resources information notice);
regulations under section 2 of the Pollution Prevention and Control Act 1999 (regulation of polluting activities etc);
regulations under section 61 of the Water Act 2014 (regulation of water resources etc).
An order that provides for variable monetary penalties in reliance on subsection (2) must provide for the amount of those penalties not to exceed an amount specified in the order.
In this section, “water company” means—
a water undertaker or sewerage undertaker, or
a water supply licensee or sewerage licensee within the meaning of the Water Industry Act 1991.
But an offence is to be regarded for the purposes of this section as committed by a water supply licensee or sewerage licensee only if it is committed by such a licensee in the course of the activities to which its licence relates.
Subsection (2) applies if the Environment Agency or the Natural Resources Body for Wales (“the relevant agency”) is satisfied that it has the power to impose a fixed monetary penalty on a water company in respect of a specified offence committed by the company.
The relevant agency must impose the penalty unless—
the relevant agency considers that there are exceptional circumstances that mitigate the culpability of the company, or
alternative enforcement action (see subsection (6)) is in contemplation or in progress.
A “specified offence” is an offence specified in regulations made by statutory instrument by—
the Secretary of State, in relation to the duty of the Environment Agency, or
the Welsh Ministers, in relation to the duty of the Natural Resources Body for Wales.
The only offences that may be specified are those within section 7(3) (offences to do with pollution control, abstraction, impounding, drought etc).
The specification of such an offence may be limited to cases of a particular description.
In subsection (2)(b), “alternative enforcement action” means—
criminal proceedings, or
the imposition of a variable monetary penalty.
Regulations made under or by virtue of Part 3 of the 2008 Act may provide for the grounds of appeal referred to in section 40(6)(c) of that Act not to extend to the relevant agency’s decision to impose a fixed monetary penalty so far as that decision concerns the application of subsection (2)(a).
The procedure required by section 40 of the 2008 Act (procedure for imposing fixed monetary penalties) is otherwise to be followed, in respect of a penalty proposed or imposed further to the duty in subsection (2), in a way that is consistent with that duty.
A statutory instrument containing regulations under subsection (3) may not be made unless a draft of the instrument has been laid before and approved by a resolution of—
both Houses of Parliament, in the case of regulations made by the Secretary of State;
Senedd Cymru, in the case of regulations made by the Welsh Ministers.
In this section—
“the 2008 Act” means the Regulatory Enforcement and Sanctions Act 2008;
“the 2008 Act” means the Regulatory Enforcement and Sanctions Act 2008;
“fixed monetary penalty” means a fixed monetary penalty provided for under or by virtue of Part 3 of the 2008 Act (see section 39 of that Act);
“fixed monetary penalty” means a fixed monetary penalty provided for under or by virtue of Part 3 of the 2008 Act (see section 39 of that Act);
“variable monetary penalty” means a variable monetary penalty so provided for (see section 42 of the 2008 Act);
“water company” has the meaning given by section 7(5).
“water company” has the meaning given by section 7(5).
Section 7(6) also applies for the purposes of this section.
In the Water Resources Act 1991, after section 46A insert—
In section 2 of the Water Industry Act 1991—
after subsection (4) insert—;
in each of subsections (6A), (6B) and (7), for “(4)” substitute “(4A)”.
In section 41 of the Environment Act 1995 (powers of environmental regulators to make charging schemes)—
in subsection (1), after paragraph (s) insert—;
after subsection (1A) insert—
The Water Industry Act 1991 is amended as follows.
For the italic heading before section 86, substitute “Drinking Water Inspectorate”.
In section 86 (appointment and functions of inspectors)—
for the heading substitute “Appointment and functions of inspectors”;
in subsection (1)—
omit the “and” after paragraph (a);
after paragraph (b) insert ; and
In section 86ZA (charging of fees by inspectors), after subsection (3) insert—
The Water Industry Act 1991 is amended as set out in subsections (2) and (3).
In section 143A(3)(b), after “regulations” insert “or, in the case of regulations made by the Secretary of State (rather than the Welsh Ministers), by which that entitlement is otherwise to be established”.
After section 143A insert—
The Digital Economy Act 2017 is amended as set out in subsections (5) and (6).
In section 38 (disclosure of information to water and sewerage undertakers)—
in subsection (2), for “people living in water poverty” substitute “eligible people”;
after subsection (9) insert—
In section 39 (disclosure of information by water and sewerage undertakers), in subsection (2), for “people living in water poverty” substitute “eligible people (see section 38(9A))”.
After section 12I of the Water Industry Act 1991 insert—
After section 16B of the Water Industry Act 1991 insert—
In section 25 of the Water Industry Act 1991 (power to make special administration order on winding-up petition)—
the existing text becomes subsection (1);
in that subsection for “an application” substitute “a petition”;
after that subsection insert—
This Act extends to England and Wales.
The following provisions come into force on the day on which this Act is passed—
this section;
section 1 (rules about remuneration and governance);
section 2 (financial transparency requirements);
section 7 (civil penalties: modification of standard of proof);
section 8 (automatic penalties for certain offences);
section 9 (abstraction and impounding: power to impose general conditions);
section 11 (charges in respect of Environment Agency and NRBW functions);
section 12 (Drinking Water Inspectorate: functions and fees).
The following provisions come into force on such day as the Secretary of State may by regulations appoint—
section 3 (pollution incident reduction plans), so far as relating to undertakers whose areas are wholly or mainly in England;
section 4 (emergency overflows), so far as relating to undertakers whose areas are wholly or mainly in England;
section 5 (nature-based solutions), so far as relating to undertakers whose areas are wholly or mainly in England;
section 10 (requirement for Ofwat to have regard to climate change etc), so far as relating to powers or duties exercised or performed in relation to appointment areas (within the meaning of the subsection (4B) inserted by the section) wholly or mainly in England.
The following provisions come into force on such day as the Welsh Ministers may by regulations appoint—
section 3 (pollution incident reduction plans), so far as relating to undertakers whose areas are wholly or mainly in Wales;
section 4 (emergency overflows), so far as relating to undertakers whose areas are wholly or mainly in Wales;
section 5 (nature-based solutions), so far as relating to undertakers whose areas are wholly or mainly in Wales;
section 10 (requirement for Ofwat to have regard to climate change etc), so far as relating to powers or duties exercised or performed in relation to appointment areas (within the meaning of the subsection (4B) inserted by the section) wholly or mainly in Wales.
The following provisions come into force two months after the day on which this Act is passed—
section 6 (impeding investigations: sentencing and liability);
section 13 (special provision in charges schemes);
section 14 (modifications by Secretary of State of water company’s appointment conditions etc to recover losses);
section 15 (modifications by Welsh Ministers of water company’s appointment conditions etc to recover losses);
section 16 (winding-up petitions).
The power to make regulations under this section includes power to make—
different provision for different purposes or areas;
transitional or saving provision.
In relation to the coming into force of section 4, regulations under this section may make provision by reference to matters determined by—
the Environment Agency, so far as relating to undertakers whose areas are wholly or mainly in England;
the Natural Resources Body for Wales, so far as relating to undertakers whose areas are wholly or mainly in Wales.
Regulations under this section are to be made by statutory instrument.
A duty to consult under or by virtue of this Act may be satisfied by consultation that took place wholly or partly before the passing of this Act.
This Act may be cited as the Water (Special Measures) Act 2025.