Water bosses could now face jail for cover-ups

Law-breaking water company executives face tougher punishments, including possible prison sentences, under new powers that have come into force in England and Wales.

Bosses who fail to co-operate or obstruct investigators looking into sewage spills can now be jailed for up to two years.

The government said the threat of tougher sentences would act as a “powerful deterrent”.

At the same time a highly critical report from the public spending watchdog accuses the government and regulators of failing to manage risk and drive investment in the water sector, contributing to higher bills for customers.

The National Audit Office’s report said consumer trust was at an “all-time low”.

It pointed the finger at the regulators, Ofwat, the Environment Agency and the Drinking Water Inspectorate, as well as at the Department for Environment, Food and Rural Affairs (Defra), for failing to drive improvements to the system.

Water companies have come under fire in recent years for allowing more frequent discharging of sewage spills, polluting rivers and lakes.

Firms have been accused of paying dividends to shareholders and bonuses to executives, while failing to invest enough money in the water infrastructure to cope with a growing population and more extreme weather.

However, it is Defra and the regulators who are jointly responsible for setting the framework the water companies operate under.

The government said the new powers to punish executives were needed because in the past water companies had failed to hand over vital evidence related to illegal sewage discharges.

Regulation had been “weak and toothless” with no accountability, said Environment Secretary Steve Reed.

“It’s shocking that not a single water executive faced a fine, let alone a prison sentence, despite widespread law-breaking,” he told the BBC’s Today programme.

Campaign group River Action welcomed the new measures but said they would only be effective if they were used.

“Without delivering actual prison sentences, it’s just theatre,” chief executive James Wallace said. “If the government is serious let’s see real jail time, not just headlines.”

Consumers were currently “paying the price for regulatory failure and corporate greed”, he said, and called for an end to the “failed privatisation experiment”.

The industry body Water UK said it was right that water companies were held accountable and that the industry was focused on delivering new investment to secure supplies and end sewage spills.

Water firms wanted to see “more direction” from government, simpler regulation, and more decisions devolved to local communities, a spokesperson said.

Earlier this week Water UK told the BBC it would back a change to the system so that companies would no longer be responsible for monitoring their own levels of sewage pollution.

It said a new “more robust” third-party monitoring system should be put in place.

Currently, water companies are responsible for sampling water quality themselves to identify pollution. However, there have been incidents of misreporting, which regulators said had sometimes been deliberate.

The government has set up an independent commission to review how the sector is run and regulated, which is expected to publish its findings by July.