Welsh Water accepts Ofwat findings and agrees £44.7m programme to reduce sewage spills
Welsh Water has agreed to spend £44.7m on sewage and river improvements after Ofwat found the company breached its legal obligations in operating its wastewater treatment works and network.
Ofwat opened an investigation into Dŵr Cymru Welsh Water in July 2024 as part of a sector-wide inquiry covering all water and wastewater companies in England and Wales.
The regulator found Welsh Water failed to operate, maintain and upgrade its wastewater assets to handle the volume of sewage and wastewater passing through them.
Ofwat also found the company failed to put adequate monitoring processes in place and that its senior management and board were not receiving sufficient information about how the network was performing.
Welsh Water has accepted the findings.
A spokesperson said: “We accept the findings of Ofwat’s investigation and apologise for where we have fallen short of the standards that our customers and regulators rightly expect from us.”
The agreed programme of £44.7m would be funded by Welsh Water rather than through customer bills, and is investment on top of the £4.2bn the company says it is spending between 2025 and 2030, which includes £2.5bn dedicated to environmental improvements and £889m specifically targeted at storm overflows.
Under the deal, £40.6m will fund work to reduce spills at specific storm overflows and carry out investigations and sealing works on private sections of the sewer network to tackle groundwater infiltration.
Welsh Water describes groundwater entering the sewer network as a major cause of frequent spills.
A further £4.1m will go toward improving river water quality in sensitive catchments.
That sum includes £1m to establish the Cymuned Natur fund, which will provide grants to community groups and charities working to protect and enhance the natural environment within Welsh Water’s operating area.
The agreed package replaces a financial penalty of £40.6m, equivalent to 7.5% of Welsh Water’s relevant turnover, which Ofwat had the power to impose.
The Welsh Water spokesperson said the company had already begun a transformation programme covering wastewater services, governance and compliance arrangements.
“We have started a major transformation programme across the company, including within our wastewater services, focused on improving performance, strengthening operational oversight and accelerating investment to deliver better outcomes for rivers and coastal waters,” the spokesperson said.
Lynn Parker, Senior Director for Enforcement at Ofwat, said the investigation had found “serious and unacceptable breaches” in how Welsh Water operated and maintained its sewage works.
She said: “We now expect them to focus on putting things right so that customers can regain trust in their water company and the critical service they provide.”
This is the seventh case in Ofwat’s sector-wide wastewater investigation, bringing the total value of enforcement action across all companies to more than £300m.
Ofwat has opened a public consultation on its proposed decision, which closes at 5pm on Thursday 2 April 2026.
Representations can be submitted by email to [email protected] or by post to Ofwat, Centre City Tower, 7 Hill Street, Birmingham, B5 4UA.
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