Millions in water company fines to power local-led restoration

21 Jan 2026 08:52 AM

Water companies who broke environmental rules are now funding the recovery of England’s waterways by local communities and environmental groups.

Water companies who broke environmental rules are now funding the recovery of England’s waterways, as local communities and environmental groups are being put in the driving seat to clean up rivers, lakes and seas.  

The government is reinvesting £29 million from water company fines into local projects which clean up our environment – funding over 100 projects which will improve 450km of rivers, restore 650 acres of natural habitats and plant 100,000 new trees.  

 This includes doubling funding for catchment partnerships – community-led groups that work to improve waterways in their local area – giving them £1.7m per year over the next two years. This is part of the government’s commitment to give communities greater influence over water environment planning and decision-making.  

The money will also support the Water and Abandoned Metal Mines Programme and Water Environment Improvement Fund, supporting projects to restore habitats, improve water quality and tackle pollution at source. The additional funding is expected to attract at least a further £11m from private sector investment. 

Water Minister Emma Hardy said:

We are taking decisive action to fix our water industry by holding companies to account. We’re making them pay and putting the money back into restoring our rivers, lakes and seas.  

We’ve already introduced powers which blocked bonuses for polluting water executives and secured £104 billion to fix crumbling infrastructure.   

Now we’re backing local communities, who know their waterways best, by doubling the funding they receive. This is a key part of our Water White Paper which sets out a long-term vision to shift from clearing up pollution to preventing it in the first place.

It comes as the government launches a once-in-a-generation plan to overhaul Britain’s water system through the Water White Paper. Reformed regional planning will be at the heart of the system - empowering the people who know their local environment best to lead the recovery by putting prevention first.  

This approach will be underpinned by a new Regional Water Planning Steering Group, bringing councils, water companies, farmers, and developers together to facilitate joined-up local plans to tackle river pollution, water resources and housing growth - protecting communities and delivering better value. The group will launch this year in 2026 to test the reformed approach before rollout from 2027.  

These reforms are part of the government’s forward-looking approach, giving clear focus through a new single water regulator that will prioritise stopping problems before they happen.  

The additional funding for catchment partnerships will build on the success of previous projects:  

• On the River Petteril in Cumbria, farmers worked with United Utilities, Natural England, Network Rail and the Eden Rivers Trust through the Eden Catchment Partnership to reduce phosphate levels – improving water quality, enhancing biodiversity and reducing flood risk. Funding was provided by United Utilities, Network Rail and government via the Countryside Stewardship scheme, and the results demonstrate how knowledge and information sharing across partner organisations can deliver benefits from multiple angles.  

• The Nene Valley Catchment Partnership’s work to build better communities through nature in urban areas – specifically at Foot Meadow Island, an area of green space within the Northampton Enterprise Zone. The space had been largely abandoned by residents due to its recent characterisation as a space for antisocial behaviour. Encouraging residents to get involved in improvements both for the community and for habitat on the adjacent River Nene is creating a better place to live and instilling a sense of ownership which means people will continue to look after their stretch of the river into the future.   

• Collaborative working between the Environment Agency, National Trust, and farmers to bring nature-based solutions to tackle climate change in the Porlock Vale in Somerset. Through unique river restoration and habitat creation techniques, 10km of river channel were restored and reconnected to the floodplain, helping to reach a 38% reduction in flood peak. Two beaver families were introduced to the river, and they have already developed the sites into complex wet woodland habitats. This project achieved £3 million in match funding following an initial £500k investment. 

The Water White Paper marks a once-in-a-generation reform for Britain’s water system, prioritising clean water, fair bills, and long-term investment for infrastructure.