Ofwat proposes £44.7 million enforcement package for Dŵr Cymru Welsh Water for wastewater failures

12 March 2026

• £44.7m to be paid by Welsh Water with the company also required to rectify any identified breaches and ensure its future compliance
• Ofwat found serious and unacceptable breaches in how Dŵr Cymru Welsh Water has operated and maintained its sewage works and network
• This is the seventh case in Ofwat’s wastewater investigation, with this proposed enforcement action bringing the total to over £300m Ofwat has today (12 March 2026) proposed a £44.7m enforcement package following its findings that Welsh Water has breached its legal obligations in operating its wastewater treatment works and network.

Ofwat’s investigation found that Welsh Water has failed to operate, maintain and upgrade its wastewater assets adequately to ensure they could cope with the flows of sewage and wastewater coming to them. The company also failed to have in place adequate processes and oversight by its senior management and Board to ensure its assets were performing adequately and that it was meeting the legal requirements expected of it.

In acknowledging these breaches, Welsh Water has agreed to take the steps necessary to address the problems identified and there is now a proposed redress package of £44.7 million which would need to be delivered during 2025-30. These costs would be absorbed by the company, and not through higher customer bills and is investment over and above existing plans committed to as part of our 2024 Price Review.

The redress package includes:

• £40.6m to address harm and reduce spills at specific overflows. The company will also investigate and carry out sealing works on private parts of the sewer network to tackle groundwater infiltration which is a significant contributor to frequently spilling overflows.
• An additional £4.1m will be invested to improve river water quality in extremely sensitive catchments. Lynn Parker, Senior Director for Enforcement at Ofwat, said:

“Our investigation has found serious and unacceptable breaches in how Dŵr Cymru Welsh Water has operated and maintained its sewage works and networks, which has resulted in excessive spills from storm overflows to the environment. We now expect them to focus on putting things right so that customers can regain trust in their water company and the critical service they provide.

“We understand that the public wants to see transformative change. That is why we are prioritising this sector-wide investigation, which is holding companies, like Welsh Water, to account. Pending this consultation, will have issued enforcement action totalling £300m.”
A consultation will now be open to the public and key stakeholders to offer any comments before Ofwat’s final decision is announced. The consultation closes on Thursday 2nd April at 5pm and can be found here: https://www.ofwat.gov.uk/consultations/

ENDS

Notes for editors

• You can find a link to the relevant enforcement documents here: https://www.ofwat.gov.uk/regulated-companies/investigations/open-cases/enforcement-cases/
• Ofwat can impose financial penalties of up to 10% of a company’s relevant turnover. In deciding whether to impose a penalty and the level of that penalty, Ofwat will take account of the particular facts and circumstances of the case under consideration to establish the appropriate level of penalty to impose.
• Had this proposed enforcement package not been brought forward, a penalty would have been applied where the money would have been returned to the Consolidated Fund operated by HM Treasury.
• The £44.7m enforcement package Ofwat has secured is greater than if a penalty had otherwise been imposed on the company (which would have been £40m, 7.5% of Welsh Water’s annual turnover).
• Instead, the money will remain in the water sector and be spent on making improvements to service for the benefit of Welsh Water customers and the local environment.
• Ofwat notes that Welsh Water does not have the same financial model as other water companies. While Welsh Water is a private limited company, its ultimate parent company, Glas Cymru, is a company limited by guarantee. As such, it does not have shareholders and so typically, Welsh Water does not pay out dividends. Instead, any financial profits are retained in the business. In the absence of shareholders, the proposed financial package will be funded through these retained profits.