The water regulator is set to treble its enforcement capabilities following an £11.3 million budget increase by the Treasury.
Ofwat said the funding should send a “strong signal” to water companies that now is the time for them to deliver for customers and on the environment, as well as allowing it to take “robust, effective action” when companies fail to do so.
In order to receive the additional funding, Ofwat will be increasing the licence fee charged to water companies.
This increase comes on the back of additional powers handed out to regulators by the government in its recent ‘Plan for Water’. The moves are designed to help drive better environmental performances by water companies.
Ofwat will be able to change water company licences without the consent of the company, while the Environment Agency has been given free reign to set unlimited fines for firms flouting their environmental responsibilities.
The Environment Agency has also seen its annual budget increased by £2.2 million to carry out enforcement action.
Ofwat is currently conducting its largest ever investigation with live enforcement cases underway into six companies looking at their management of sewage treatment works.
Last month two water companies were hit with record-breaking fines for allowing sewage spillages over a number of years at their sewage treatment works.
Anglian Water was handed a £2.65 million fine for allowing sewage to overflow into the North Sea.
Meanwhile South West Water received a £2.1m fine for environmental offences spanning 2016 to 2020.
The funding will also enable Ofwat to oversee the next price review and focus on building capability to help drive long term infrastructure delivery.
David Black, Ofwat chief executive, said: “We welcome this significant uplift in funding, which will see our capacity to take tough enforcement action almost trebled, while also enabling us to push for a step up in investment for the sector.
“This comes at an important time for the water sector as consumers in England and Wales rightly call for better performance from their water providers, and Ofwat continues to push for the changes we want to see in the sector.
“This announcement will send out a strong signal; that the time is now for water companies to deliver for customers and the environment. Should they fail in those commitments, Ofwat has never been better resourced or more determined to take robust, effective action.”
Water minister Rebecca Pow, said: “When we set out our priorities for Ofwat last year, we asked them to challenge water companies to show how they will be more ambitious in protecting the environment, whilst also getting the basics right.
“Combined with the commitments in our Plan for Water to bolster tougher enforcement action, this funding will give them a greater capacity to hold water companies to account and protect our waters.”