Ofwat proposes £44.7 million enforcement package for Dŵr Cymru Welsh Water for wastewater failures
Ofwat has today (12 March 2026) proposed a £44.7m enforcement package following its findings that Welsh Water has breached its legal obligations in operating its wastewater treatment works and network.
Ofwat’s investigation found that Welsh Water has failed to operate, maintain and upgrade its wastewater assets adequately to ensure they could cope with the flows of sewage and wastewater coming to them.
The company also failed to have in place adequate processes and oversight by its senior management and Board to ensure its assets were performing adequately and that it was meeting the legal requirements expected of it.
In acknowledging these breaches, Welsh Water has agreed to take the steps necessary to address the problems identified and there is now a proposed redress package of £44.7 million which would need to be delivered during 2025-30.
These costs would be absorbed by the company, and not through higher customer bills and is investment over and above existing plans committed to as part of our 2024 Price Review.
The redress package includes:
£40.6m to address harm and reduce spills at specific overflows. The company will also investigate and carry out sealing works on private parts of the sewer network to tackle groundwater infiltration which is a significant contributor to frequently spilling overflows.
An additional £4.1m will be invested to improve river water quality in extremely sensitive catchments.
Lynn Parker, Senior Director for Enforcement at Ofwat, said:
“Our investigation has found serious and unacceptable breaches in how Dŵr Cymru Welsh Water has operated and maintained its sewage works and networks, which has resulted in excessive spills from storm overflows to the environment. 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.
“We understand that the public wants to see transformative change. That is why we are prioritising this sector-wide investigation, which is holding companies, like Welsh Water, to account. Pending this consultation, will have issued enforcement action totalling £300m.”
A Welsh Water 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.
“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 investigation has considered both historic and more recent compliance, and we accept that improvements are needed. We have already taken steps to strengthen our governance, oversight and compliance arrangements as part of a wider transformation programme across the business.
“We have also agreed a £44.7 million redress package with Ofwat which will direct funding towards environmental improvements and actions to reduce the impact of storm overflows.
“As part of this package, nearly £40.6 million will fund additional work to reduce spills from specific storm overflows and tackle groundwater entering the sewer network — a major cause of frequent spills. This will include targeted investment at priority sites as well as investigations and improvement work on parts of the sewer network to reduce infiltration.
“A further £4.1 million will be invested to help improve river water quality in extremely sensitive catchments. This will include establishing a new £1 million Cymuned Natur Fund to support community groups and charities across our operating area that are working to protect and enhance the natural environment.
“These actions are in addition to the £4.2 billion we are investing between 2025 and 2030, including £2.5 billion dedicated to environmental improvements — with £889 million specifically targeted at improving storm overflows.”
