Our response to Ofwat’s proposed undertakings for Dŵr Cymru/Welsh Water following wastewater pollution incidents

We welcome the opportunity to respond to Ofwat’s consultation on its proposal to accept Section 19 undertakings from Dŵr Cymru/Welsh Water (DCWW).

CCW views on Ofwat’s proposals

CCW supports strong regulatory action where wastewater failures have harmed customers and the environment. Ofwat’s consultation presents evidence that DCCW has failed in its duties relating to the management, operation, maintenance and performance of its wastewater treatment works and sewerage system, leading to damaging spills into rivers and bathing waters. This is a serious breach of environmental regulations, statutory duties and the company’s licence obligations.

CCW recognises that enforceable undertakings can be appropriate where they deliver faster and more direct benefits than financial penalties alone. However, from a consumer perspective, undertakings must be:

• Ambitious
• Additional, in that they are over and above what the company already incurs
• Enforceable
• Transparent

CCW welcomes the proposed redress package of £44.7m to deliver schemes to reduce spills, protect biodiversity and deliver wider environmental benefits. We welcome Ofwat’s confirmation that the redress will be funded by the company and costs will not be shared with customers.

However, we consider Ofwat should only accept the proposed redress package of £44.7m if Ofwat can clearly demonstrate that:

• The undertakings will deliver greater benefit than a financial penalty alone, leading to visible environmental improvements.
• The undertakings are additional to existing obligations.
• Ofwat will monitor delivery and report publicly on progress.

Meeting these criteria will be essential to restoring customer trust and ensuring that enforcement delivers meaningful outcomes.

Role of undertakings

CCW recognises that redress can provide a more direct route to improving outcomes than penalties, provided they are sufficiently robust. We therefore support their use where they clearly deliver greater benefit to customers and the environment.

A key consumer concern is that undertakings must be additional to existing obligations. Customers should be confident that:

• the measures are not already funded through bills.
• the company is not receiving credit for work it was already required to do.

Environmental outcomes

Given the strong link between environmental performance and customer trust customers need to see tangible improvements, not just commitments. It is critical that undertakings deliver:

• measurable reductions in pollution and spills
• visible improvements in local environments
• outcomes that customers can understand and value.

Funding and fairness

CCW emphasises that:

• the costs of undertakings must be borne by the company and its investors.
• customers must not fund remediation of past failures.

This is particularly important given wider affordability pressures.

Transparency and monitoring

CCW considers that undertakings must include:

• clear delivery milestones
• independent monitoring and assurance of the companies’ activities
• regular public reporting

Customers should be able to see:

• what is being delivered
• when it will be delivered
• whether it is making a difference

Wider deterrence and confidence

CCW also notes the importance of maintaining confidence in the regulatory framework. Undertakings should not weaken the deterrent effect of enforcement action. They must represent a credible and meaningful response to serious failings.

Customers need to be confident that companies are held properly to account.