A High Court judgment has confirmed the Environment Agency’s power to prosecute seven former Southern Water employees, including the company’s former Chief Executive, over allegations they conspired to manipulate sewage monitoring data and enable the company to avoid an estimated £45 million in penalties while securing performance bonuses for the company and individuals involved.

The ruling clears the way for the prosecution to proceed ahead of a criminal trial, due to begin in September. The High Court also refused the defendants’ application for anonymity, meaning those facing prosecution can now be publicly identified.

The Environment Agency alleges that between 2019 and 2021, former Southern Water employees manipulated environmental monitoring – tankering sewage away before inspections, doctoring monitoring data, switching off monitors, falsely recording “no flow” conditions, and misleading Environment Agency officers.

According to the High Court judgment, these actions involved the deliberate manipulation of wastewater treatment works to undermine the regulatory controls of the wastewater quality monitoring system for which the Environment Agency is responsible.

Such a deception would have allowed Southern Water to under-report sewage spills, avoid penalties estimated at more than £45 million, and secure company and individual performance bonuses to which those involved were not entitled.

The irregularities were first identified by Peter Hammond of Windrush Against Sewage Pollution (WASP), whose forensic investigation helped uncover the manipulation of sewage monitoring data and bring the matter to the Environment Agency’s attention.

James Wallace, CEO of River Action, said: “Today’s judgment is a victory for the Environment Agency and a welcome sign that our environmental regulator is beginning to show real teeth. The High Court has confirmed the EA’s power to hold individual executives, as well as water companies, to account for alleged fraud linked to environmental regulation.

“We also pay tribute to Peter Hammond of Windrush Against Sewage Pollution, whose investigation helped expose the alleged manipulation of sewage monitoring data and bring it to the Environment Agency’s attention.

“The allegations at the heart of this case represent an egregious abuse of power. According to the Environment Agency, senior figures at Southern Water deceived regulators, enabling the company to avoid tens of millions of pounds in penalties while securing financial rewards. The prospect of executives facing criminal prosecution should send shockwaves through the water industry. But it should not have taken five years to reach this point. We need faster enforcement so that those responsible cannot simply move on before the law catches up with them.

“We now call on the Prime Minister and the Secretary of State for the Environment to ensure the Environment Agency has the resources and backing to pursue polluters without fear or favour and make personal accountability the norm for environmental crime.”

The Southern Water ruling lands amid mounting frustration with the water industry more broadly. In Cornwall, councillors have passed a vote of no confidence in South West Water, arguing the company has failed to manage sewage systems.

Cornwall Council members raised concerns over raw sewage spills in seas and rivers, which they said continued to impact the county’s environment and public health, despite record bills. The vote also called for the government to remove the firm from local water and wastewater systems, transferring management to a publicly-owned organisation.

A total of 68 members voted in favour of the motion at the meeting on Tuesday, with two members abstaining. It follows similar votes of no confidence from 60 town and parish councils across Cornwall in recent months.

Loveday Jenkin, the councillor who put forward the debate, said it was not a criticism of those working for South West Water in Cornwall, but focused on the company’s senior management and infrastructure.

Leigh Frost, leader of Cornwall Council, said the current model was not working. “We are paying more and more as bill-payers, and we’re getting less for that, and that’s not fair and that’s not right,” he said. “So, what we are saying is, we need to look at the model; the model needs to change.”

He added: “South West Water is not an isolated incident. This is a national issue across our whole water industry, so I’d like to think that the prime minister has got one eye on the situation.”

Asked by the BBC whether new Prime Minister Andy Burnham is likely to address the situation further, Labour MP for Truro and Falmouth Jayne Kirkham said it did seem “something he will probably be looking at very shortly now that he is in power.” Noting similar scrutiny around Thames Water in London, she added: “He has talked about taking control back of public infrastructure, so that may be something he is looking at.”

A spokesperson for South West Water said: “We recognise concerns about water quality in Cornwall and we continue to work proactively with councils through regular bespoke briefings to explain our local plans and deliver improvements. We’re investing £760m to tackle storm overflows and have reduced spills by 17% in last year, with spill duration down by 25%. We know there is more to do, but the data shows the plan is working.”

South West Water provides water and sewerage services to about 1.8 million customers in Devon and Cornwall, the Isles of Scilly, plus small parts of Dorset and Somerset.

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