Environment Secretary Dame Angela Eagle said on Thursday she will take further action against water company bosses, as only one company won four stars in the Environment Agency’s rating.
The move follows the first joint report from the Environment Agency, Natural Resources Wales, the Drinking Water Inspectorate and Ofwat, which pools the regulators’ data for the first time.
The government said pooling closes loopholes that let a failing company point to a good score from one regulator while falling short with another. It described the report as a step towards the single new water regulator for England and Wales.
Eagle said: “People are sick of excuses.” She added that she is demanding answers from failing companies and will be “shining a spotlight” on the worst offences, and said the report was further proof that “root-and-branch reform cannot wait”.
The joint report is published alongside the Environment Agency’s Environmental Performance Assessment Report, which found pollution incidents remain far too high.
There were six Category 1 incidents during 2025, which the government called an unacceptable failure to protect people and the environment. Ministers will prioritise those sites for visits.
Category 1 incidents are those with a major, serious, persistent or extensive effect on the environment, people or property.
Ministers will also meet the chief executives of underperforming companies to ask about performance and about delivery of key infrastructure improvements.
Eagle will set out improvement actions for each company, covering leakage from pipes, sustained reductions in pollution incidents and better customer satisfaction scores.
Under rules that took effect in 2025, a one-star rating automatically blocks executive bonuses. That applies at Southern Water, Thames Water, South West Water and Yorkshire Water. The same applies to any company with a Category 1 incident.
Together, the government said, those rules trigger bonus bans for six chief executives. It acknowledged that executives are still being rewarded despite persistent underperformance, and Eagle is looking at options to strengthen the ban.
The Environment Agency’s earlier assessment, published on 23 July 2024 and covering 2023, gave four stars to three companies: Severn Trent Water, United Utilities and Wessex Water.
In that round, Southern Water, South West Water, Thames Water and Yorkshire Water were rated two stars.
The 2024 report counted 47 serious pollution incidents in 2023, up from 44 in 2022. The Environment Agency said then that it had secured 63 prosecutions against water companies since 2015, with fines of more than £151 million.
Environment Agency Chair Alan Lovell said at that time that “the pace of improvement continues to fall short”.
Regulators will use the full range of enforcement powers, including fines and prosecutions, where companies fail to deliver, the government said. It pointed to the Water (Special Measures) Act 2025 and rapid automatic penalties, with a strengthened Water Bill to follow.
The government said Eagle had already set out expectations for the next Price Review, warning companies they must deliver better value for money for struggling households.
Further details on strengthening the bonus ban are expected in the coming weeks.