Question to the Department for Environment, Food and Rural Affairs:

To ask Her Majesty's Government into what fund the fines levied against Southern Water by (1) Ofwat on 25 June 2019, and (2) the Environment Agency on 9 July, were paid; and what consideration they have given to using this money to make reparations for the environmental damage caused by the company.

On 9 July 2021, Southern Water was handed a record £90 million fine after pleading guilty to thousands of illegal discharges of sewage which polluted rivers and coastal waters in Kent, Hampshire and Sussex. This court ordered fine, the largest ever imposed on a water company, is absolutely appropriate and welcomed. It will rightly be paid solely from the company's operating profits, rather than customer bills.

In accordance with Managing Public Money (the official guidance on government handling of finance), fines and penalties income are surrendered to the Consolidated Fund. The Consolidated Fund receives the proceeds of taxation and other government receipts which fund public expenditure.

In June 2019, Ofwat imposed a penalty package on Southern Water of £126 million for spills of wastewater into the environment from its sewerage plants and for deliberately misreporting its performance. Of the £126 million Ofwat penalty package, £3 million was paid as a fine, while the remaining £123 million was to be reimbursed to customers. Southern Water customers received a £17 rebate in 2020/21 and can expect a £11 rebate in each of the following four years.

The Government is committed to improving the water environment. On 22 July, the Government and water regulators set out an ambitious programme of reform to build back greener from the pandemic through the review of the Water Industry National Environment Programme (WINEP). The amended WINEP will deliver greater environmental benefits for every pound invested by companies.

From 2020 to 2025 water companies are investing £7.1 billion to protect and improve the environment. This includes the £5.2 billion invested through WINEP.