An environmental group known as River Action is planning to take legal action against Ofwat, the water regulator, alleging that the regulator has unlawfully permitted customers to foot the bill for years of neglect by the water industry.

River Action is set to file a legal claim this month, asserting that the recently approved bill increases for customers could potentially be utilized to rectify infrastructure failures that should have been attended to years ago. The organization contends that as a result, customers could be forced to pay twice.

Under existing rules, the public is not supposed to cover the costs of investments aimed at ensuring that water companies are compliant with their operating permits. This compliance includes adhering to restrictions on the discharge of raw sewage into rivers and ensuring treatment facilities operate correctly.

Currently, water companies are under investigation by Ofwat for breaching their permits. This inquiry is being conducted alongside a criminal investigation by the Environment Agency.

River Action’s legal challenge particularly concerns funding allocated to wastewater treatment works and pumping stations by United Utilities, which operates in and around Lake Windermere. The group argues that Ofwat has allowed United Utilities to redirect funds intended for future projects to address past failures.

Emma Dearnaley, the head of legal at River Action, stated, “We believe Ofwat has acted unlawfully by approving these funds without ensuring they are spent on genuine improvements to essential infrastructure. Instead, this funding is being permitted to cover up years of failure.”

According to River Action, under PR24, the price review approved by Ofwat in January, the regulator has likely allowed other companies to operate in a similar manner, which means customers end up paying for failures that should have been addressed with previous funding.

Ricardo Gama, of Leigh Day, representing the campaign group, stated that Ofwat has said it won’t allow price increases to be used for fixing historical issues, which are leading water companies to breach their permits.

River Action argues that Ofwat has not adequately verified whether the funds it allows United Utilities to collect from customers will actually be utilized for the intended purpose.

An Ofwat spokesperson responded to these claims by stating, “We reject River Action’s allegations. The PR24 process thoroughly examined business plans to ensure customers were getting fair value and investment was justified. We agree that customers should not pay twice for companies to regain compliance with environmental permits, and we have incorporated appropriate safeguards in our PR24 determinations to ensure this. We will respond to their letter in due course.”

Source: https://www.theguardian.com/environment/2025/mar/06/river-campaigners-to-sue-ofwat-over-water-bill-rises