Environment Secretary Angela Eagle summoned the heads of the water industry to Whitehall after a new report showed that the environmental performance of major companies is deteriorating despite investment. "People are sick of excuses," Eagle said.
The report was jointly produced by the Environment Agency, the Drinking Water Inspectorate, Natural Resources Wales and Ofwat. It marks the first time these four agencies have combined their data in a joint report, a step towards merging currently fragmented regulatory powers under a single oversight body.
According to environmental performance ratings, eight of the nine water companies in England were rated as "poor" or "requires improvement". The overall score was 16 out of a possible 36 "stars", a drop from 19 the previous year and the lowest rating since the process was introduced. There were 74 serious pollution incidents, a category that causes significant harm to the environment — just one fewer than the previous year, and that despite billions of pounds in investment, bans on executive bonuses and public outcry.
A total of 2,666 pollution incidents were recorded in England in 2025, an increase of 40 per cent compared with 2016, the Environment Agency said. Thames Water had the most pollution incidents, followed by Anglian Water, United Utilities, Yorkshire Water and Southern Water.
Eagle warned that changes could be imposed on the industry. "Water companies have let the public down time and again, and today's report is further evidence that fundamental reform cannot wait," she said. The Department for Environment, Food and Rural Affairs (Defra) stated that Eagle is preparing "further measures", with "starker consequences" for executives at companies that fail to meet standards. Defra noted it would "set out a clear set of improvement measures", such as "addressing water losses", "reducing pollution incidents" and "improving customer satisfaction". Rules that came into force last year would block bonuses for executives at companies that receive a one-star rating.
The charity River Action assessed that this is a system that rewards shareholders and creditors while rivers, wildlife and bill payers lose out. "This is a system that rewards shareholders and creditors, while our rivers, the wild world and bill payers lose out," said chief executive James Wallace. Wallace stated that Thames Water, as the worst offender, should immediately go into special administration. "Ministers must end the failed experiment of privatisation, review alternative models including public ownership and give regulators the power to charge polluters, not the public," he added.
Richard Benwell, chief executive of Wildlife and Countryside Link, assessed that the new regulator "must be more than a merger of existing institutions". In his words, the new regulator "needs a clear legal duty to restore nature, strong environmental targets and the powers and resources to enforce the law across the water industry, industrial agriculture and chemical companies".
The industry body Water UK stated that the report shows the lowest level of water losses in history, as well as other areas of good performance. "However, it remains a fact that the environmental performance of some water companies is not good enough," they noted. They added that more than half of all pollution incidents last year were caused by blockages or vandalism, which is not under the direct control of water companies, but that there is clearly still work to do. "It will take time, but record investment will help ensure water supply, support growth and stop sewage entering rivers and seas," they said.
The United Kingdom is one of only two countries in the world where water supply is fully privatised. The other is Chile, where water privatisation was imposed in the 1980s by a military dictatorship.
