Water companies must pay to fix illegal sewage discharges rather than pass the cost to customers, lawyers for the charity WildFish are to argue in the high court.
The campaign group will allege at a judicial review that the government’s £56bn plan to reduce raw sewage dumping from storm overflows is illegal.
Lawyers will argue on Tuesday that dumping raw sewage has been in breach of the law for 30 years, unless the discharges take place in exceptional circumstances such as very heavy rainfall. They will point out that the regulator, Ofwat, has made clear that water companies must pay to make their infrastructure compliant with regulations rather than passing the costs on to customers.
But under the government’s storm overflow plan, the £56bn cost of upgrading the capacity at treatment plants to reduce the scale of raw sewage dumping is to be paid for through customer bills, with ministerial approval. Estimates of bill hikes to pay for the fix range from £91 a year to reports that water bills will go up by 40% to fund the investment needed.
Nick Measham, chief executive of WildFish, which is bringing the judicial review, said: “It is time for the government to … make the water companies do what they have promised to do, and have been required to do by law, for nearly 30 years.
“This must be at their own expense. Our wild fish, our rivers and all of us have had enough.
“If we win this case, it will fall to the secretary of state, Ofwat and the Environment Agency jointly to ensure the water companies now deliver what the law has required them to do for years.”
In a separate legal challenge also being heard this week, the Good Law Project is supporting the Marine Conservation Society, Richard Haward’s Oysters and the surfer and activist Hugo Tagholm, who argue that the government’s strategy allows water companies to pollute waters and beaches for another 27 years.
Water companies discharged untreated sewage through storm overflows more than 300,000 times in 2022 for a total of 1.7 million hours. These discharges are supposed to take place only in exceptional circumstances, but evidence uncovered by the Guardian revealed water companies have been using sewage dumping routinely to keep their systems going.
Scrutiny over the discharges of raw sewage has led to a public outcry, and the government attempted to force water companies to invest in infrastructure at treatment plants to cut discharges in its storm overflow reduction plan.
The strategy sets a series of targets up to 2050 but its ambitions have been limited by the need to spread the cost to customers over an extended period. The government makes clear in its plan that bill rises will pay for the investment, rather than water company shareholders.
Public outrage over sewage spills has been fuelled by the revelation that the companies are expecting the public to pay.
Under the plan, by 2035 water companies will have to improve all storm overflows discharging into or near every designated bathing water, and improve 75% of overflows discharging to high-priority nature sites. By 2050, this will apply to all waterways.
WildFish lawyers argue that a substantial proportion of raw sewage discharges from storm overflows are already unlawful under the urban wastewater regulations 1994, and setting targets to 2050 will allow water companies to keep illegally spilling raw sewage.
It wants the government to drop the storm overflow reduction plan and instead enforce the 1994 law and stop water companies from dumping raw sewage in rivers and to ensure water companies foot the bill for any increased sewage capacity required by the law, not pass it on to customers.
In its legal defence Defra said the secretary of state for environment, food and rural affairs had acted lawfully when preparing and publishing the storm overflow plan.
The government argued its plan went beyond any existing legal requirements to eliminate harm from storm overflows, and was the largest infrastructure investment plan to improve water quality.
The government’s legal case argues that the storm overflows plan contains clear provisions to avoid any disproportionate impact to customer bills.
Emma Dearnaley, legal director of Good Law Project, whose challenge will also be heard this week at the high court, said: “The public is – rightly – angry and upset and calling for urgent action on sewage pollution.
“This hearing is a huge moment for the future of our rivers and seas. This is our chance to force the government to put in place a robust plan to put an end to the sewage scandal blighting our country.”
The legal challenges come as concerns continue about the financial stability of many water companies. Last week Thames Water was in crisis talks with Ofwat and the government amid suggestions ministers were considering putting the company into special administration to preserve services for the public.
The move came after Sarah Bentley, the Thames Water CEO, quit unexpectedly. The Guardian revealed Thames, which has debts of £14bn, was facing a £10bn black hole in its finances as it reached out to shareholders for an equity injection.
Since privatisation, water companies have collectively taken on close to £60bn in debt. This has triggered repeated warnings from Ofwat about the sustainability of their finances.
Yorkshire Water, which is also heavily indebted, last week said it had raised £500m on Monday to shore up its balance sheet. Its shareholders include Singapore’s sovereign wealth fund GIC and the US private equity group Corsair Capital.
The vast bulk of the cash will be funnelled immediately into the repayment of an intercompany loan.
Yorkshire Water and Thames Water are two of five firms that Ofwat warns are in precarious financial positions, along with Portsmouth Water, Southern Water and South East Water.
• This article was amended on 4 July 2023. Corsair Capital is based in the US, not Germany as stated in an earlier version.
