Ofwat accepts £40m river package from Yorkshire Water in lieu of wastewater breaches fine

Ofwat has accepted a £40m package of undertakings over 2025-30 from Yorkshire Water in lieu of the financial penalty it mooted last summer, for wastewater breaches. This was 7% of the company’s relevant of turnover, at £47m.

In its final decision last week, Ofwat confirmed the company had breached:

• Urban Wastewater Treatment Regulations (UWWTR) – by failing to operate and maintain its wastewater assets adequately and to upgrade them where necessary, and by failing to put in place adequate processes and systems to routinely monitor and maintain the capacity and performance of its assets to ensure they were meeting legal requirements.

• Section 94 of the Water Industry Act 1991 – by systemically breaching its UWWTR duties and failing effectually to provide drainage and deal with the contents of its sewers.

• Condition P12 of its licence, which requires it to have in place adequate resources and systems of planning and internal control to carry out its legal obligations.

But Ofwat praised Yorkshire for working constructively with it since draft proposals were published in August 2024. Now the regulator said it is satisfied: that the undertakings will secure the company’s compliance, eliminating the need for an enforcement order; that the £40m is more than it would have ultimately imposed as a penalty (£36.9m, 5.5% of Yorkshire’s relevant turnover); and that the approach would deliver a better outcome for customers and the environment than a fine being paid to the Treasury.

Specifically, £36.6m will accelerate improvements to storm overflows in environmentally sensitive areas, to reduce spills to below 20 a year, and £3.4m will improve the quality of the rivers in its area through work with the Great Yorkshire Rivers initiative. Yorkshire also committed to an action plan to ensure all of its storm overflows are compliant with legal requirements.

The undertakings will not be funded by customers.

Ofwat is investigating all wastewater companies for similar breaches and urged others to follow Yorkshire Water’s proactive example.

Lynn Parker, senior director for enforcement commented: “Our investigation has found serious failures in how Yorkshire Water has operated and maintained its sewage works and networks, which has resulted in excessive spills from storm overflows. This is a significant breach and is unacceptable.

“We are pleased that Yorkshire Water has recognised this failure and is taking steps to put it right for the benefit of customers and the environment. They deserve credit for stepping up and agreeing an enforcement package with us that will help get things back on track as soon as possible. These commitments will contribute to the company delivering on its promises for cleaner rivers and seas.

“We now expect them to move at pace to correct the remaining issues our investigation has identified. We hope more companies will follow this example so that the public sees transformative change across the sector.”

Yorkshire Water chief executive Nicola Shaw said: “We know there’s still more for us to do. We’re at the forefront of the industry to get this resolved and we’re looking forward to delivering our ambitious plans to improve river health in Yorkshire. We apologise for our past mistakes and hope this redress package goes some way to show our commitment to improving the environment. The overflows we’ll be investing in will be ones that were due to receive investment in the 2030-35 period and we’ll be accelerating improvements to them. We are pleased that Ofwat understands the importance of this money staying within our region to help fund vital environmental improvements that will have real benefits for the customers of Yorkshire.”

Last August, Ofwat also proposed fines of 9% of turnover (£104m) for Thames Water and 5% of turnover (£17m) for Northumbrian.