DEFRA’s new Water Restoration Fund is reinvesting up to £11 million in water company fines and penalties in improving biodiversity and community access to blue and green spaces.

This new grant funding is now available to support local groups, farmers, landowners and community-led schemes in bolstering their capacity and capabilities for projects to improve their water environment.

Sewage spills reach an all-time high

Data from the Environment Agency in March showed sewage spills reached an all-time high in 2023, while the Rivers Trust has warned not a single river in England is currently classified as being in good overall health.

In its Event Duration Monitoring report, the Environment Agency published data for 2023 showing the frequency and duration of spills from storm overflows in England. The data for 2023 shows a 54% increase in the number of sewage spills compared to 2022, and a 13% increase compared to 2020. The increase in spills compared to 2022 is partly because 2023 was named by the Met Office as the 6th wettest year since its records began in 1836.

The launch of the Water Restoration Fund follows significant action taken in recent months to hold water companies to account, including a ban on bonuses for water company executives where firms have committed serious criminal breaches, subject to Ofwat consultation, and plans to quadruple the Environment Agency’s regulatory capacity, enabling them to carry out 4,000 water company inspections by the end of this financial year.

It also forms part of the government’s long-term plan, as set out in its Plan for Water, to clean up our waters and make polluters pay for the damage they cause to the environment.

Funding for this new grant comes exclusively from the fines received from:
• Anglian Water: £3,085,000
• South West Water: £2,150,000
• Thames Water: £3,334,000
• United Utilities: £800,000
• Yorkshire Water: £1,600,750

The monies collected from the aforementioned water companies will be allocated for water improvements in the areas on which they were accrued. These penalties and fines are additional to any reparations, and all water company environmental fines and penalties since April 2022 have been ringfenced to directly improve the water environment.

Rivers are in a desperate state of affairs

The Rivers Trust in its State of our Rivers report says: “Our vital rivers are plagued by sewage, chemical, nutrient and plastic pollution. We’ve heavily modified them and removed natural features so that they no longer function as they should. This makes the effects of pollution much worse and leaves rivers less able to respond to the pressures of climate change.

“The data is clear: Our rivers are in a desperate state of affairs:

• No single stretch of river in England or Northern Ireland is in good overall health.
• Just 15% of English, 31% of Northern Irish and 50% of Irish river stretches reach good ecological health standards.
• Toxic chemicals that remain in ecosystems for decades pollute every stretch of English rivers.”

Precious waterways are important

Environment Secretary Steve Barclay said: “I know how important our precious waterways are to local communities and nature, which is why we’re taking tough action to ensure our regulators are well-equipped to hold those who pollute them to account.

“The Water Restoration Fund will ensure that money from fines and penalties – taken from water company profits only – is channelled directly back into our waterways.

“Community-led projects are vital to improving and maintaining water quality across the country, and this fund will help build on that success.”

Improve water and wetlands

Natural England’s chief executive Marian Spain said: “Natural England welcomes the creation of Defra’s Water Restoration Fund, using the money from water company fines and penalties to improve water and wetlands for nature and people, and looks forward to supporting Defra to make good use of the funds now available.

“The fund is a great opportunity for landowners, communities and nature bodies to help make a real difference to the condition of our Sites of Special Scientific Interest and to restore natural processes in catchments to provide the nature and health benefits that society needs from water.”

Apply for funding

Grants are now open to apply for this funding, with grant awards expected to be issued in late July. For further details, click here.

Further improvements recently delivered to the water environment include:
• Requiring companies to monitor 100% of storm overflows in England – providing a complete picture of when and where sewage spills happen.
• Removing the cap on civil penalties for water companies and broadening their scope so swifter action can be taken against those who pollute our waterways.
• Requiring the largest infrastructure programme in water company history – £60 billion over 25 years – to revamp ageing assets and reduce the number of sewage spills by hundreds of thousands every year.
• Increasing protections for coastal and estuarine waters by expanding the Storm Overflow Discharge Reduction Plan, prioritising bathing waters, sites of special scientific interest and shellfish waters.
• Providing £10 million in support for farmers to store more water on their land through the Water Management Grants to support food production and improve water security.
• Speeding up the process of building key water supply infrastructure, including more reservoirs and water transfer schemes.