The Office for Environmental Protection (OEP) is to conclude its investigation into the regulation of combined sewer overflows after securing significant progress in tackling the issues it has raised.
Through its investigation the OEP found that there have been failures to comply with environmental law by the Department for Environment, Food and Rural Affairs (Defra), the Environment Agency (EA) and Ofwat relating to the regulation of network CSOs.
Helen Venn, the OEP’s Chief Regulatory Officer, said: “It is clear through the report of the Independent Water Commission published earlier this week and the government response that there is a need and an appetite to improve how the water sector operates to protect the environment. Significant reforms are on the way.
“While there are no quick fixes, we are confident that as a result of our investigation, future reforms relating to regulation of untreated sewage discharges can be based on a clearer understanding of what the law requires and the current roles and responsibilities of the different authorities.
"The decision notices we issued in December formally clarified the actions we required to be taken by the public authorities to rectify failures. Many of those actions have now been taken, are being progressed, or commitments are in place to do so. Significant progress has been made.
“While this means it is right that we conclude the investigation at this time and there is no need to proceed to court action, we will continue to monitor to ensure the actions committed to but not yet taken are progressed.”
“As a result of the OEP’s investigation, there is now clarity that the regulatory system should only allow untreated sewage discharges to take place in exceptional circumstances, unless the cost of preventing or mitigating them would be excessive.
“There is also improved clarity over the roles and responsibilities of the different bodies in overseeing this complex system and we have seen a stepping up of required regulatory activity, such as Ofwat’s recently concluded investigations resulting in enforcement action against three companies.
“Over the course of the investigation we have seen a considerable increase in the responsible public authorities’ focus on this issue. This has revealed the scale of the issues which they are now taking action to address. These actions will contribute to improvements and mean that future reforms to the water sector will be built on firm legal foundations.”
Steps taken by the authorities in response to the OEP’s recommendations include:
Defra has replaced outdated guidance with a new policy and guidance document that better reflects the legal duties of sewerage undertakers.
Ofwat has revised its enforcement guidance and taken enforcement action against several water companies.
The Environment Agency has updated its Storm Overflow Assessment Framework and is progressing with plans to modernise permits and introduce spill limits.
Progress has also been demonstrated on cross-cutting issues, such as the clarification of roles and responsibilities between the authorities and improvements to the assessment of cost-effective solutions for reducing CSO discharges.
The OEP will publish detailed reports on the investigation in the autumn. The investigation was launched in response to a complaint received by Salmon & Trout Conservation UK, now known as WildFish.
Notes
Investigation findings
Defra
The OEP investigation concluded that there had been three failures to comply with environmental law by Defra [1]:
- Failing to take proper account of environmental law by:
- Drafting guidance for water companies and regulators which did not reflect the true legal extent of sewerage undertaker duties
- Failing to amend or replace the guidance after a relevant Court of Justice of the European Union (CJEU) decision in 2012
- Misunderstanding its legal duty under environmental law to make enforcement orders
- Failing to exercise its duty under environmental law to make enforcement orders
Failing to discharge its duty to secure compliance with environmental law relating to emissions controls. (NB OEP view is that this ceased to be an issue in 2020)
The OEP recommended steps to remedy, mitigate or prevent reoccurrence of the failures include revising the guidance, ensuring delegated responsibilities are carried out properly, agreeing Memorandums of Understanding (MoUs) with the EA and Ofwat and ensuring that permits for CSOs are amended appropriately.
Response:
March 2025: Storm Overflows: Policy and Guidance published, setting out the correct interpretation of the relevant laws.
April 2025 - MoU between Defra, Ofwat and the EA drafted
Ofwat
The OEP investigation concluded that there had been two failures to comply with environmental law by Ofwat [2]:
- Failing to take proper account of environmental law with regards to duties on sewerage companies and its duty to make enforcement orders.
- Failing to exercise its duty under environmental law to make enforcement orders.
The recommended steps to remedy, mitigate or prevent reoccurrence of the failures included updating enforcement guidance, agreeing and publishing a new MoU with the EA, ensuring relevant responsibilities are carried out properly and making sure that appropriate assessments have been carried out on CSOs and time-bound plans are in place for any improvement schemes to be implemented.
Response
April 2025: Revised enforcement guidance published, demonstrating that Ofwat’s approach takes proper account of environmental law
Mar-June 2025 - Publication of final decision in enforcement investigations against Yorkshire, Thames and Northumbrian Water resulting in an enforcement order or undertakings to secure compliance.
April 2025 - MoU between Defra, Ofwat and the EA drafted
Ongoing: Enforcement framework in place; on-going investigations into sewerage undertakers
Environment Agency
The OEP investigation concluded that there had been three failures to comply with environmental law by the EA [3]:
- Failing to take proper account of environmental law in devising guidance relating to permit conditions
- (As a result of the point above) setting permit conditions that were insufficient to comply with environmental laws
- Failing to exercise permit review functions in relation to discharges from CSOs
The recommended steps to remedy, mitigate or prevent reoccurrence of the failures included updating the Storm Overflow Assessment Framework and any guidance relating to CSO permit setting, agreeing MoUs with Defra and Ofwat, ensuring CSO permits comply with the appropriate regulations and assessment findings.
Response
March 2025: Revised SOAF published with lower spill thresholds
April 2025: MoU between Defra, Ofwat and the EA drafted
In train: Introduce spill limits, or thresholds, into permits (short-term and long-term). Consultation completed; implementation begins 2026
In train: Undertake permit modernisation project; Project underway; 8,400 CSO permits to be reviewed; phased implementation. (In total, 14,250 storm overflow permits to be reviewed, the OEP investigation focused on CSOs.)
References
1: ss.18 and 94 of the Water Industry Act 1991 (as supplemented by the Urban Waste Water Treatment (England and Wales) Regulations 1994 which implement the Urban Waste Water Treatment Directive 1991 ((91/271/EEC)) and the Water Environment (Water Framework Directive) (England and Wales) Regulations 2017 which implement the Water Framework Directive 2000 (2000/60/EC).
2: ss.18 and 94 of the Water Industry Act 1991 (as extended by the Urban Waste Water Treatment (England and Wales) Regulations 1994).
3: The Urban Waste Water Treatment (England and Wales) Regulations 1994, the Water Environment (Water Framework Directive) (England and Wales) Regulations 2017 and the Environmental Permitting (England and Wales) Regulations 2016.
