Approximately £11 million collected from fines and penalties imposed on water companies will fund the newly established Water Restoration Fund (WRF), as announced by Environment Secretary Steve Barclay last week. This initiative aims to allocate these funds to enhance the water environment.

Since April 2022, fines and penalties levied on water companies for environmental infractions have been earmarked for direct environmental improvement efforts. The WRF will distribute these funds through competitive grants to local groups, farmers, landowners, and community-led projects. These projects may include enhancing biodiversity and improving public access to aquatic and terrestrial natural spaces in regions affected by water company violations.

The creation of the WRF is part of a broader initiative detailed in the government's Plan for Water, which focuses on mitigating environmental damage and ensuring that polluters contribute to remediation efforts.

In recent months, the government has introduced measures to enhance regulatory oversight of water companies. These include a prohibition on executive bonuses at companies found guilty of serious legal violations, pending consultation by Ofwat, and a significant increase in the Environment Agency’s capacity to perform 4,000 inspections by the end of the fiscal year.

The WRF is financed solely through fines and penalties collected from water companies, which are separate from any additional reparations these companies may pay for breaching environmental laws.

The fund will accept applications from a variety of stakeholders across England, including environmental NGOs, local authorities, and national park authorities. The allocation of the £11 million will be specific to the regions where the fines were originally imposed, with detailed amounts listed for each water company region. Further information about the fund and application process is available in the application guidance provided by the department.

Additional enhancements to water management include mandatory full monitoring of storm overflows, removal of limits on civil penalties for infractions, a £60 billion investment over 25 years to update water infrastructure, expanded protections for coastal and estuarine waters, and increased funding for water management grants to support agricultural water storage and infrastructure development.