The environmental performance of England's largest water companies has worsened over the past year, according to a joint report by four regulators that rated eight of the nine companies as “poor” or “requiring improvement”.
The Environment Agency published the assessment with the Drinking Water Inspectorate, Natural Resources Wales and Ofwat. It is the first time the four bodies have pooled their data in a single report, a step towards combining regulatory responsibilities that are currently fragmented.
The report recorded 74 serious pollution incidents, the category defined as causing significant harm to the environment. That is one fewer than the previous year, despite billions of pounds of investment, bans on executive bonuses and sustained public criticism.
On the watchdog's environmental performance assessment, the nine companies between them were awarded 16 “stars” out of a possible 36. That is down from 19 the previous year, and the lowest total since the process began.
There were 2,666 pollution incidents in England in 2025, a 40% increase on 2016, the Environment Agency said. Thames Water recorded the most, followed by Anglian Water, United Utilities, Yorkshire Water and Southern Water.
Angela Eagle, the environment secretary, has summoned water industry bosses to Whitehall. “People are sick of excuses,” Dame Angela said. She warned that changes could be imposed on the industry: “Water companies have let the public down time and time again, and today's report is further proof that root-and-branch reform cannot wait.”
The Department for the Environment, Food and Rural Affairs said Eagle was preparing to take “further action”, with “tougher consequences” for executives at failing companies, and that it would “set out a clear set of improvement actions” such as “tackling leakage”, “reductions in pollution incidents” and “improving customer satisfaction”. Rules that took effect last year block bonuses for executives at any company given a one-star rating.
Water UK, the industry's trade body, pointed to other findings in the same report. “Today's report shows the lowest level of leakage in history, as well as other areas of good performance,” it said. “However, the fact remains that the environmental performance of some water companies is not good enough.”
The trade body also noted the recorded causes of individual incidents. “While more than half of all pollution incidents last year were caused by blockages or vandalism, which are not in the direct control of the water companies, there is clearly more work to do,” it said, adding that “record investment will help secure water supplies, support growth and end sewage entering rivers and seas”.
Richard Benwell, chief executive of Wildlife and Countryside Link, said a new single regulator “must be more than a merger of existing institutions”, and should have a clear legal duty to restore nature along with the powers and resources to enforce the law.
The arithmetic of the star system deserves closer attention than it has received. The industry held 19 stars last year and holds 16 now. Over the same period, serious pollution incidents fell from 75 to 74.
Three stars, therefore, were spent preventing one serious pollution incident. This newspaper can find no published exchange rate, but the implied one is clear enough, and it is the first time the cost of an avoided incident has been quantified in stars.
The bonus rule sharpens the position. A single star is the threshold at which executive bonuses are blocked, which makes the first star the most valuable object in the English water industry and the remaining thirty-five a matter of presentation.
The same report also produced two historic results in opposite directions on the same morning: the lowest leakage in history, and the lowest star total since the assessment began. An industry capable of setting its best and its worst record simultaneously is, on any reasonable measure, the most historic industry in the country.
There is one further refinement. More than half of all incidents, the trade body says, were caused by blockages or vandalism and were outside the companies' direct control, which leaves slightly fewer than half that were not. The stars are awarded for all of them. The Department of Unnecessary Research has asked the four regulators for a single clarification before next year's report: how many stars are available for water that stayed in the pipe.