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• All £15.7m to be paid for by the company and its shareholders for the benefit of Northumbrian Water customers and the local environment.
• As part of the enforcement package, Northumbrian Water has recognised its failures and is taking agreed steps to put it right.

Ofwat has concluded its investigation into Northumbrian Water securing an enforcement package of £15.7m to be paid by the wastewater company and their shareholders, not customers.

This package is greater than the penalty which would otherwise have been imposed on the company. It ensures, this money will remain in the water sector and be spent on making improvements to services for the benefit of Northumbrian Water customers and the local environment. If a penalty had been applied, the money would have been returned to the Consolidated Fund operated by HM Treasury.

In agreeing to the enforcement package, Northumbrian Water has stepped up and committed to putting things right. It includes:

• A £2m donation to Northumbrian Water’s “Branch Out Fund”. This fund awards grants up to £10,000 for local projects to improve the natural environment.
• £2m investment to further reduce spills at specific overflows.
• A £8.3m investment in the Tyneside Sewer Smart Network through 800 smart sensors, automatic controls and real time decision software to optimise capacity and minimise spills. This aims to reduce spills in the area by 15% and spill volumes by 30%.
• A £3.4m investment in installation of Flow to Full Treatment monitors at 19 sites.
• A binding commitment to work with the Environment Agency to ensure that the Whitburn system complies fully with environmental legislation.

Lynn Parker, Senior Director for Enforcement at Ofwat, said:

“Our investigation has found failures in how Northumbrian Water has operated and maintained some of its sewage works and networks, which has resulted in excessive spills from storm overflows. The contraventions we have found at some of their sites will have had an impact on the local environment and customers and it is unacceptable.

“We are pleased that Northumbrian Water has agreed this package. We now expect them to move at pace to correct the issues our investigation has identified. We hope more companies will follow this example so that the public sees transformative change across the sector.”

Notes for editors

• You can find a link to the relevant enforcement documents here: Notice of Ofwat’s proposal to issue an enforcement order and impose a financial penalty on Northumbrian Water – Ofwat
• 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 a penalty been applied, it would have been set at 4% of Northumbrian Water’s annual turnover (£13.6m)
• The investment made by Northumbrian Water will be over and above the company’s PR24 commitments. Customers will therefore benefit from earlier delivery of this investment at no cost to themselves.