Karen Bradley, Member of Parliament for the Staffordshire Moorlands has today welcomed an announcement by the water regulator that rules on dividends paid out by water companies will be tightened.
The new powers made possible through the Government’s landmark Environment Act mean that Ofwat will be able to stop the payment of dividends in certain circumstances. The regulator is now modifying licences to require water companies to take account of environmental performance and customer delivery when deciding whether to pay dividends. They will also be required to hold a strong credit rating and dividends payments could be stopped if their financial health is at risk.
Responding to the announcement, Karen said:
“I welcome today's announcement by Ofwat that rules on water company dividends will be tightened. Backed by Government and made possible by our Environment Act, it makes clear that water companies must now prioritise environmental performance and good customer service.”
It follows a demand made by Environment Secretary Thérèse Coffey last month that every water and sewerage company in England provide a clear assessment and action plan on every storm overflow.
Water Minister, Rebecca Pow, said:
“It is wrong for water companies to be responsible for environmental damage and poor performance but not face the penalties. It has been happening too often and it needs to stop.
“These new powers, made possible through our Environment Act, will enable Ofwat to clamp down on excessive cash pay-outs and make sure companies put customers first. This will apply when a company is not meeting expectations on performance or is facing questions over its financial resilience – and ultimately means we go further in holding water companies to account.”
Record fines have been secured from water companies that break the law and a consultation is set to launch in the Spring on making it easier and quicker for regulators to enforce civil penalties.
Funding from all penalties and fines will also now be invested in schemes that benefit our natural environment.
