The Environment Agency is seeking views on a proposed new levy on certain water discharge activities carried out by water companies, designed to fully recover the costs of its enforcement activities.
Under ‘managing public money’ guidance, the EA has a responsibility to recover the costs of its regulatory activity by setting charges for the work it does at the appropriate level. The new Water (Special Measures) Act 2025 allows it to recover all costs directly from water companies when carrying out water industry enforcement functions.
This consultation proposes a new levy on certain water discharge activities carried out by water companies. It could not previously recover these costs, and says the proposed levy will help to fund an improved approach to regulation by resourcing its enforcement activity of the water industry.
In line with its enforcement and sanctions policy, the Environment Agency wants to:
- stop illegal activity from occurring or continuing
- put right environmental harm or damage, also known as restoration or remediation
- bring illegal activity under regulatory control, and into compliance with the law
- punish offenders and deter them (and others) from offending in the future
The proposed levy is proportionate to the scale and complexity of water industry infrastructure. It will be calculated according to the number, type and volume of permits for operating the sewage discharge activities.
The levy will only impact the water industry, it will not impact other sectors at this time. For the purposes of the levy, the water industry is defined as the ‘sewerage undertaker’.
The EA uses the term ‘sewerage undertaker’ to refer specifically to statutory undertakers for sewage who operate the public sewerage system, holding appointments as sewerage undertakers in the Water Industry Act 1991. They are currently:
· Anglian Water
· Northumbrian Water
· Severn Trent Water
· Southern Water
· South West Water
· Thames Water
· United Utilities
· Welsh Water
· Wessex Water
· Yorkshire Water
The levy will also apply to new appointments and variations (NAVs) appointed by Ofwat that provide sewerage services, if they hold relevant permits with the Environment Agency.
The proposed introduction of the water industry enforcement levy will only impact on sewerage undertakers who have permitted discharges with references 2.3.81 to 2.3.93 of the Environmental Permitting Subsistence Charge Tables in The Environment Agency (Environmental Permitting and Abstraction Licensing) (England) Charging Scheme 2022. The levy rate is applied as a total annual levy, additional to annual permit charges with references 2.3.81 to 2.3.93.
The consultation opened 14 April 2025 and will close on 26 May 2025. To participate, click here.
