Regulator Slams Anglian Water for Sewage Failures as Firm Agrees to £62.8 Million Settlement

Anglian Water is under pressure after the industry regulator, Ofwat, uncovered what it described as a serious breach in the company's management of its sewage operations. The fallout could cost the utility giant up to £62.8 million.

The regulator’s investigation revealed excessive discharges from storm overflows, leading to what it called a significant failure in wastewater management. As a result, Ofwat has proposed a series of corrective measures. These include operational improvements across Anglian Water’s wastewater treatment sites and upgrades to the broader sewer network.

Initially, the company was facing a potential fine of £57.1 million. However, because Anglian Water acknowledged the findings and proactively agreed to fund remedial work, a financial penalty was waived.

Anglian, which is one of six water firms banned from paying its chief executive a bonus for last year, said: "We understand the need to rebuild trust with customers and that aspects of our performance need to improve to do that."

Lynn Parker, Ofwat's senior director for enforcement, said: "Our investigation has found failures in how Anglian Water has operated and maintained its sewage works and networks, which has resulted in excessive spills from storm overflows.

"This is a serious breach and is unacceptable."

Instead, the company will invest £57 million to modernise its wastewater systems and address overflow issues across its service area. Additionally, it will contribute £5.8 million to a fund designed to support environmental and social initiatives that benefit local communities.

Mark Thurston, who took over as Anglian's chief executive in July last year from Peter Simpson, said: "It will take time and investment to achieve a significant reduction in spills, but we are making good progress."

Looking further ahead, Anglian Water has pledged to allocate £1 billion toward cutting storm overflow spills in half by the end of the decade. This substantial investment is part of the company’s broader environmental strategy.

But customers are likely to feel the financial impact. By 2030, the average annual water and wastewater bill for Anglian Water customers is projected to reach £631. That’s a sharp rise compared to the £491 average seen just last year.

A recent review by the Independent Water Commission highlighted a broader issue across the sector. According to its findings, companies have been ramping up customer bills after years of inadequate investment in infrastructure. Many firms argue they were constrained by regulatory controls that kept customer prices artificially low, which in turn limited their ability to fund essential upgrades to ageing pipes and treatment plants.

Ofwat, the industry body at the centre of this debate, has not escaped scrutiny either. The same report suggested it be dissolved and folded into a broader, single regulatory authority. In the meantime, it has approved a substantial increase in water bills across England and Wales. The new pricing structure, set to roll out over five years, is expected to raise £104 billion for infrastructure improvements.

Despite these commitments, public frustration continues to mount. Since the privatisation of the water sector in 1989, companies have faced heavy criticism for prioritising shareholder returns over public service. Billions of pounds have been paid out in dividends, much of it to international investment firms.

Anglian Water is no exception. The company is owned by a parent entity registered in Jersey, with major investors based in Canada, Australia and Abu Dhabi. For critics, this adds fuel to the fire, raising questions about whether profits are being siphoned overseas at the expense of environmental responsibility and service quality at home.