Environment Agency Lands Record Funding Boost to Fight Water Pollution Crisis

The UK’s water watchdog is receiving its largest budget ever to combat pollution. According to the Government, the Environment Agency will receive over £189 million for the 2025-2026 financial year, marking a significant increase from previous years. Just last year, the agency received £161 million. Previously, the amount was £115 million in 2023 and £114 million in 2022.

This significant boost is part of the Government’s broader push to hold water companies accountable after years of underinvestment in infrastructure and environmental safeguards. The Department for Environment, Food and Rural Affairs (Defra) states that the increased funding will be allocated towards hiring more enforcement officers, updating equipment, and deploying cutting-edge technology to monitor and address environmental harm.

Importantly, this rise in funding isn’t coming from taxpayers. Defra confirmed that the extra money will be raised through charges to water companies. In other words, the polluters themselves will bear a greater share of the cost.

Environment Secretary Steve Reed said: “The public are furious about sewage pollution in our rivers, lakes and seas.

“This Government is cleaning them up, including the biggest boost to enforcement in a decade, paid for by the water companies responsible for it.

“Our changes give the water watchdog the resources they need to tackle pollution and clean up our rivers, lakes and seas for good.”

To make sure the new funds are used effectively, the Environment Agency has committed to meeting specific efficiency targets over the next three years. Defra noted that the agency had already saved more than £23 million in 2024 through cost-cutting and smarter operations.

According to sources at the PA news agency, the Environment Agency has welcomed the funding increase. Others in the field have echoed that sentiment. Ewan McGaughey, a law professor at King’s College London, called the move a “positive step,” especially considering that the agency’s funding was slashed in half back in 2011.

But he said that the sector needs investment in infrastructure to clean up the country’s waterways, arguing that it cannot be done “when 35% of our bills go to pay banks and shareholders of privatised water companies”.

“The Government needs to remove the licences from the worst polluters, like Thames Water, and transition to public ownership to cut bills and raise standards, like 90% of the world’s cities, where water is public.

“We can have clean water, or we can have privatised water, but we can’t have both.”

Looking ahead, the Government plans to launch a consultation on a new water sector levy. This would allow the Environment Agency to directly recoup the costs of its enforcement efforts from the industry it regulates.

Meanwhile, the grant-in-aid funding from Defra, which covers statutory work, such as water quality testing and investigations into waste crime, will be reduced this year. That’s because a larger share of the agency’s funding will now come from charges paid by companies for permits and services.

These charges include both initial application fees and annual payments. In some cases, additional funding also comes from other Government departments. If approved, the upcoming water levy could also help fill out this pool of financing.

The Environment Agency is also stepping up its efforts on the ground. This year alone, it plans to conduct more than 10,000 inspections of water company assets. Since July 2024, it has already launched a record 81 criminal investigations into pollution incidents tied to these companies.

And it’s not just the utilities under the microscope. The agency also intends to scale up its inspections of farms, aiming for 6,000 visits annually by 2029 to help curb agricultural runoff and protect the nation’s rivers and waterways.