Anglian Water to pay £62.8m over sewage failures – redress package to support local communities and environment

Anglian Water, which supplies homes and businesses across Bedfordshire, Cambridgeshire and much of the East of England, is to pay £62.8 million after a regulatory investigation found it had failed to maintain sewage treatment works – leading to excessive storm overflow spills across the region.

The investigation by Ofwat, the industry regulator, uncovered what it called a "serious breach" in how the company operated and maintained its wastewater network, including storm overflows. Anglian, which manages Grafham Water near St Neots – one of the area’s major reservoirs – is one of six water companies banned from awarding CEO bonuses this year.

While the firm could have faced a £57.1 million fine, it instead proposed a redress package worth £62.8 million, which Ofwat has accepted for public consultation. Crucially, the entire package will be paid by shareholders, not customers.

The redress includes:

• £5.8 million to launch a new Community Fund for environmental and social causes across the Anglian Water region, with grants prioritising projects near storm overflows or infrastructure works.

• £57 million to tackle pollution and flooding in at least eight high-risk areas, using measures such as sustainable drainage systems (SuDS), upgraded storm tanks, and fixes to surface water and sewage misconnections.

In addition, the company says it will accelerate investment at high-risk locations and implement a long-term plan to ensure legal compliance and reduce spills. It has allocated £1 billion to cut storm overflow incidents by 50% by 2030, as part of a wider £11 billion investment programme over the next five years.

Mark Thurston, Anglian Water’s CEO, said:

“We understand the need to rebuild trust with customers and that aspects of our performance need to improve. Reducing pollution and spills is our number one operational focus.”

However, the news comes amid growing frustration over rising bills. By 2030, the average annual Anglian Water bill is expected to reach £631 – up from £491 last year. Critics have pointed to years of underinvestment by water companies and shareholder payouts, while infrastructure has deteriorated.

Anglian Water is owned by a parent company registered in Jersey, with major investors based in Canada, Australia and Abu Dhabi.

The redress package is now open to public consultation before Ofwat makes its final decision. Local groups and organisations will be able to apply for funding from the new Community Fund once it launches later this year.