Water companies have been hit by a series of record fines for major sewage leaks and other pollution incidents.

Yorkshire Water was fined £1.1m for illegally discharging sewage that polluted the river Ouse near York, while Thames Water was fined £1m for repeated sewage leaks into the Grand Union canal.

The financial penalties have soared after a change in sentencing guidelines, but it is too early to tell if the number of pollution offences by water companies is falling.

The Observer revealed in 2013 that the most persistent and frequent polluters of England’s rivers and beaches were the nation’s 10 biggest water companies. They committed more than 1,000 incidents between 2005-13 but were fined a total of only £3.5m, a sum described as “pitiful” by a senior MP at the time.

However, new sentencing guidelines made the penalties more severe in July 2014 and the eight biggest fines alone since then come to a total of over £5m.

“These sorts of significant fines, which all large companies can now face for causing serious environmental damage, should act as a deterrent and help us better protect the environment and the public,” said Anne Brosnan, chief prosecutor at the Environment Agency. “Pollution incidents can impact on local communities, reduce water quality and spoil ecosystems. While water quality has improved dramatically over the last decade there is more to do.”

“The courts have basically added a nought,” said a source close to the issue. “Once it gets to that level, the boards and shareholders of water companies start to take notice.”

Tony Smith, chief executive of the Consumer Council for Water, said: “Tougher penalties also increases the risk of reputational damage, which can be another important deterrent.”

Alex Cunningham, the shadow water minister, said: “As a public service utility, the cash-rich water industry must take its responsibilities seriously. It is clear from the escalation in environmental fines that their shareholders are feeling a greater impact, but it is far from clear whether this is driving greater action.”

Water companies have been frequently criticised for making billions of pounds in profits and awarding large shareholder dividends, while paying little or no corporation tax. In October 2015, the National Audit Office found that an £800m windfall for water companies had not been passed on to consumers.

Yorkshire Water was fined £1.1m on 29 April after sewage had overflowed into the Ouse in August 2013, affecting a kilometre of the river. Three pumps are needed to cope with the volume of sewage at the works and the company was legally required to have at least one backup pump available.

But at the time of the incident, when one of the pumps failed, the backup was not working. Furthermore, the backup pump was found to be out of operation again just over a year later, during a site inspection by the Environment Agency.

A Yorkshire Water spokeswoman said: “We accept the judgment and apologise for the pollution incident. This was an unfortunate incident and the judge observed in court that Yorkshire Water takes its environmental responsibilities seriously and is clearly not a company that intentionally breaches its environmental obligations or flagrantly disregards the law.” The company was also fined £600,000 in January after sewage flowed into a lake near Wakefield, killing at least 860 fish.

Thames Water was fined £1m in January for repeated discharges of sewage into the Grand Union canal in Hertfordshire between July 2012 and April 2013. Judge Bright QC, who heard the case, explained why the fine was so large: “The time has now come for the courts to make clear that very large organisations such as [Thames Water] really must bring about the reforms and improvements for which they say they are striving because, if they do not, the sentences passed upon them for environmental offences will be sufficiently severe to have a significant impact on their finances.”

A Thames Water spokeswoman said: “We take our responsibilities to the environment extremely seriously, and have invested heavily in the past 12 months to reduce the number of pollution incidents by around half. The hard work continues, however, as any impact on our customers or the environment caused by sewage escaping from our 68,000-mile network of sewers is unacceptable.”

The company was also fined £380,000 in March, after sewage leaked into a stream in the Chilterns, which is an Area of Outstanding Natural Beauty.