Read CIWEM’s balanced and considered view on Ofwat’s new Growth Duty – will it support sustainable growth? This proposes an over-arching ‘sustainability duty’ to address the imbalance between Ofwat’s economic regulatory focus and the need for more robust environmental enforcement.

Covered in The Guardian

The Conservatives have pushed through a duty on the water regulator to prioritise growth, which experts have said will incentivise water companies to value their bottom lines over reducing sewage pollution.

Campaigners fear this move will weaken Ofwat’s ability to crack down on water companies as it may force the regulator to consider a company’s financial situation and the impact on its growth if the firm is heavily fined for polluting.

The Liberal Democrats forced a vote in parliament on Wednesday on the government’s new “growth duty” for Ofwat, which requires the regulator to “have regard to the desirability of promoting economic growth” when cracking down on water companies. They lost, as 50 MPs voted against the statutory instrument and 395 voted in favour.

The growth duty specifically mentions fines of companies as a measure that could hamper their growth. It says: “Certain enforcement actions, and other activities of the regulator, can be particularly damaging to growth.

“These include, for example, enforcement actions that limit or prevent a business from operating; financial sanctions; and publicity, in relation to a compliance failure, that harms public confidence.”