Strengthening Storm Overflow regulation: the OEP’s latest recommendations

On 11 December 2025, the Office for Environmental Protection (OEP) published three detailed investigation reports addressed to the Secretary of State for Environment, Food and Rural Affairs (DEFRA), the Environment Agency (EA) and Ofwat, assessing whether those authorities had fulfilled their statutory duties in regulating combined sewer overflows (CSOs).

The reports represent the conclusion of a three year investigation launched in June 2022 following a complaint made to the OEP by the Salmon and Trout Conservation Trust (now WildFish). The OEP investigation process involved extensive evidence gathering, the submission of information requests and the issuance of formal notices to all three regulators. In December 2024, the OEP issued Decision Notices to each of DEFRA, the EA and Ofwat, identifying serious breaches of environmental law and recommending corrective measures for each authority.

The recommendations, published on 11 December 2025, build on the OEP’s earlier findings and set out broader recommended measures to strengthen regulation, prevent recurrence of identified failures, and reinforce compliance with environmental law.

DEFRA

The OEP identified the following three breaches of environmental law by DEFRA:

1. Failing to take proper account of environmental law by:

• Drafting guidance for water and sewerage companies (WaSCs) and regulators which did not reflect the true legal extent of sewerage undertaker duties;

• Failing to amend or replace the guidance after a relevant Court of Justice of the European Union (CJEU) decision in 2012; and

• Misunderstanding its legal duty under environmental law to make enforcement orders,

2. Failing to exercise its duty under environmental law to make enforcement orders;

3. Failing to discharge its duty to secure compliance with environmental law relating to emissions controls.

The OEP did, however, acknowledge that significant progress has been made in addressing these issues and recognised that the current regulatory framework now demonstrates a marked shift towards compliance and stronger oversight. Notably, the OEP commended DEFRA for the publication of the Storm Overflows Guidance in March 2025, considering that the guidance resolves longstanding legal ambiguities and clarifies the roles of key regulatory bodies, creating a more coherent and enforceable framework.

Further recommendations for DEFRA include: 

1. To establish a formal process to monitor and review implementation of the Storm Overflows Guidance and embed this within the statutory five-year review of the Storm Overflows Discharge Reduction Plan (SODRP).

2. To track compliance with SODRP requirements through EA permitting and update associated guidance as necessary to maintain alignment.

3. To collaborate with the EA and Ofwat to review the Memorandum of Understanding (MoU) in line with the SODRP review cycle, after 12 months, and following any reforms introduced by the Independent Water Commission in the Cunliffe Report published on 3 June 2025. 

EA

The OEP identified the following three breaches of environmental law by the EA:

1. Failing to take proper account of environmental law in devising guidance relating to permit conditions.

2. (As a result of the point above) setting permit conditions that were insufficient to comply with environmental laws. 

3. Failing to exercise permit review functions in relation to discharges from CSOs.

With regard to the identified failures concerning the EA's guidance and permit conditions, the report states that these are ‘no longer ongoing’, and the OEP recognised that the EA has taken significant steps to address the issues raised. The OEP considers that a key development in this respect is the strengthened regulatory framework introduced through the Storm Overflow Assessment Framework (SOAF) 2025, which sets lower spill frequency thresholds (30, 20, and 10 spills per year, depending on the timespan of spill data) and mandates investigations where high spill rates occur. Additionally, the EA has introduced enhanced permitting measures incorporating spill frequency conditions into environmental permits, with short-term annual triggers and long-term averages over ten years. The OEP notes that these measures align with legislative requirements, marking a substantial improvement in oversight.

Further recommendations for the EA include:

1. To update its guidance “Water companies: environmental permits for storm overflows and emergency overflows” (September 2018) to reflect the revised approach to CSO regulation, including SOAF updates, spill frequency threshold permitting, and DEFRA’s 1997 Guidance.

2. To review the SOAF 2025 at least every five years, or sooner where appropriate.

3. To work with DEFRA and Ofwat to review the MoU within 12 months of signing, or earlier if required.

4. To develop a robust and transparent methodology for consistent data collection and reporting. This should enable clear tracking of progress for each CSO, provide structured summaries at each stage of the SOAF process, and support accurate reporting of Best Technical Knowledge Not Entailing Excessive Cost (BTKNEEC) assessment outcomes to ensure reliability and comparability.

5. To use improved data to regularly monitor and review the proportion of CSOs not progressed for improvement following BTKNEEC assessments.

6. To strengthen regulatory oversight of BTKNEEC assessments and their outcomes, ensuring that where CSOs are not improved, the concept of excessive costs is correctly applied through rigorous cost-benefit analysis.

Ofwat

The OEP identified two instances where Ofwat failed to comply with environmental law, by:

1. Failing to take proper account of environmental law with regard to duties on WaSCs and its duty to make enforcement orders.

2.  Failing to exercise its duty under environmental law to make enforcement orders.

Prior to the OEP issuing its Decision Notice to Ofwat in December 2024, Ofwat had not made any final enforcement orders or accepted undertakings in relation to its own investigation into water companies, launched in 2021. However, the OEP acknowledges that Ofwat has since taken several significant steps, including issuing enforcement decisions against several WaSCs and imposing a final enforcement order on Thames Water. Further, in April 2025, Ofwat published updated enforcement guidance, strengthening its previous approach. These actions have been welcomed by the OEP as a demonstration that Ofwat is ”no longer failing to comply as set out in the Decision Notice”.

Further recommendations for Ofwat include: 

1. Working with DEFRA and EA to review the storm overflows MoU 12 months after its signature, or sooner if required.

2. Collaborating with the EA to develop and implement data collection and reporting methodology.

Next Steps

The OEP has called for a coordinated response to deliver lasting improvements and address systemic regulatory gaps. Collaboration between DEFRA, EA and Ofwat will be essential to strengthen oversight and ensure environmental standards are met, although, given the government has already confirmed plans to abolish Ofwat and establish a new centralised regulator following the findings of the Cunliffe Report, it is not clear to what degree the OEP’s recommendations might be impacted or even superseded by the formation of the new ‘super’ regulator for water.

The OEP has confirmed that it will maintain oversight through two key measures:

1. Regular engagement with the authorities to review actions and share best practice.

2. Formal assessments of progress against statutory obligations and the commitments made in response to the investigation.

The first monitoring stage is scheduled for six months after the publication, marking the start of an ongoing process to track compliance and evaluate progress. The OEP has emphasised that it considers these follow-up steps to be critical to ensuring its recommendations lead to tangible improvements for the environment and the public.

Our team advise frequently on this area of law.  As such, it will continue to keep the recommendations of the OEP under review.

This article was written by Lowri Scott. 

We will continue to monitor compliance through regular engagement with all three authorities, and through assessment of progress against statutory requirements and the commitments made in response to this investigation

https://www.theoep.org.uk/report/oep-reports-investigation-regulation-combined-sewer-overflows