Water bosses face up to two years in prison for illegal sewage spills

Water bosses who cover up illegal sewage spills could be imprisoned for up to two years under a new law which comes into effect today.

The government has said such penalties are "essential" to tackle "widespread illegal sewage discharges" into rivers, lakes and seas - and to crack down on water companies which it has accused of obstructing investigations by failing to hand over evidence. The new law comes as the state spending watchdog said water regulators and the government had failed to provide a trusted and resilient industry at the same time as bills rise.

The National Audit Office said public trust in the water sector had reached a record low, adding that not since monitoring began in 2011 has consumer trust been at such a level, it said. At the same time, households face double-digit bill hikes over the next five years.

The last time bills rose at this rate was just before the global financial crash, between 2004-05 and 2005-06. Speaking to Sky News, Environment Secretary Steve Reed said UK rivers, lakes and seas were "awash with record levels of pollution" as he blamed the "toothless" previous government.

"It's shocking that no water executive or water company employee has ever been given a fine, let alone a prison sentence, despite record levels of illegal sewage dumping," he said. "That all ends today." Liberal Democrat Leader Ed Davey accused Labour of being "way too timid" in tackling issues in the water industry as he urged the government to scrap the water regulator Ofwat and replace it with a new one with tougher powers.

Regulation failure All three water regulators - Ofwat, the Environment Agency and Drinking Water Inspectorate - and the government department for environment, food and rural affairs (Defra) have played a role in the failure, the NAO said, adding they do not know enough about the condition or age of water infrastructure and the level of funding needed to maintain it. Since the utilities were privatised in 1989, the average rate of replacement for water assets is 125 years, the watchdog said.

If the current pace is maintained, it will take 700 years to replace the existing water mains. Water firms have grappled with leaky pipes and record sewage outflows into UK waterways in recent years, with enforcement action under way against all wastewater companies.

Despite there being three regulators tasked with water, there is no one responsible for proactively inspecting wastewater to prevent environmental harm, the report found. Instead, regulation is reactive, fining firms when harm has already occurred.

Financial penalties and rewards, however, have not worked as water company performance hasn't been "consistent or significantly improved" in recent years, the report said. 'Gaps, inconsistencies, tension' The NAO called for this to change and for a body to be tasked with the whole process and assets.

At present, the Drinking Water Inspectorate monitors water coming into a house, but there is no entity looking at water leaving a property. Similarly, no body is tasked with cybersecurity for wastewater businesses.

As well as there being gaps, "inconsistent" watchdog responsibilities cause "tension" and overlap, the report found. The Environment Agency has no obligation to balance customer affordability with its duty to the environment when it assesses plans, the NAO said.

Company and investment criticism Regulators have also been blamed for failing to drive enough funding into the water sector. From having spoken to investors through numerous meetings, the NAO learnt that confidence had declined, which has made it more expensive to invest in companies providing water.

Even investors found Ofwat's five-yearly price review process "complex and difficult.