This Act amends the Water Industry Act 1991, Environment Act 1995 and Water Resources Act 1991.

The Act expands civil sanction enforcement powers against water companies. 'Special administration' powers will also be extended with the objective of recovering losses. Sewerage undertakers will be required to publish annual pollution incident reduction plant, which will need to be supported by implementation reports.

The Water (Special Measures) Act 2025 will amend the Water Industry Act 1991, Environment Act 1995 and Water Resources Act 1991 and comes into force as described below.

This summary focusses on environmental requirements under the Act. The Act also concerns financial and administrative obligations for water companies.

This legislation applies in England and Wales only.

What has changed and what will change?

Changes in force from 24 February 2025

The following requirements are now in force:

• Ofwat will be able to prohibit executive bonuses from being paid if companies fail to meet environmental, consumer and financial resilience standards.
• Civil sanctions on water companies may now be exercised based “on the balance of probabilities” rather than “beyond reasonable doubt”, as is normally required by the Regulatory Enforcement and Sanctions Act 2008. This lower threshold concerns offences such as abstraction or impounding licensing breaches, contraventions of drought orders or permits and breaches of environmental permit requirements.
• Amendments to the Water Resources Act 1991 allow future regulations to be made applying general conditions on abstraction or impounding licences held by water companies.
• The Environment Agency, Natural Resources Wales and the Drinking Water Inspectorate may recover costs of water industry enforcement functions from water companies.

Changes in force from 24 April 2025

The following requirements will apply from 24 April 2025:

• Future regulations may apply automatic penalties on specified offences by water companies.
• Amendments to the Environment Act 1995 and Water Industry Act 1991 will make it an offence for water and sewerage undertakers or water supply or sewerage licensees to impede investigations by environmental regulators and drinking water inspectors.
• Special administration order and winding up powers will be expanded for water companies, with the objective of recovering losses.

Future changes

The following requirements will be brought into force by future legislation.

• Undertakers will be required to publish pollution incident reduction plans annually. These plans must address the frequency and severity of incidents, alongside steps and measures being taken to maintain systems and prevent incidents. Implementation reports must be published alongside the plans, assessing the status and success of measures in the preceding  calendar year.
• Sewerage undertakers will be required to publish data on emergency overflows within an hour of these overflows beginning and ending.
• Drainage and sewerage management plans prepared by undertakers will be required to consider the use of nature-based solutions, technologies and facilities within drainage and sewerage systems.
• When undertaking its duties or exercising powers, Ofwat will be required to consider climate change and compliance with relevant environmental targets under the Environment Act 2021.

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