REG - Water Services Auth - Proposed £24m South West Water enforcement package

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RNS Number : 4201Q  Water Services Regulation Authority  10 July 2025

Thursday 10 July 2025

OFFICIAL - SENSITIVE

 

Ofwat proposes £24 million enforcement package on South West Water for
failures in managing its wastewater treatment works and network

 

·    £24m to be paid by the company and its shareholders for the benefit
of South West Water customers and the local environment.

·    As part of the enforcement package, South West Water has recognised
its failures and is taking steps to put it right.

·    A consultation will now follow which will be open for the public and
key stakeholders to offer any final comments before Ofwat's final decision.

 

Ofwat has today (10 July 2025) proposed a £24m enforcement package following
its findings that South West Water has failed to meet it legal obligations in
managing its wastewater treatment works and network. These failures resulted
in the company spilling wastewater to the environment when it should not have
done.

 

This announcement represents the next stage of Ofwat's largest and most
complex set of investigations into all water companies and their management of
their wastewater treatment works. It follows the conclusion of cases against
Yorkshire Water, Thames Water and Northumbrian Water earlier this year that
resulted in enforcement action worth more than £160m.

 

Ofwat's investigation found that South West Water has failed to build and
operate its wastewater treatment works and sewer networks to ensure they
performed sufficiently. The company did not have in place adequate management
systems to ensure it was meeting its legal obligations in this regard,
including adequate oversight from its senior management team and Board.

 

In stepping up to acknowledge what has gone wrong and how it will put things
right, South West Water has proposed a £24m enforcement package which
includes:

 

·    Investing £20m during 2025-30 to reduce spills from specific storm
overflows. This investment will target overflows in environmentally sensitive
areas or within focused community areas.

·    Establishing a £2m local fund to tackle sewer misuse and
misconnections, which can contribute to environmental pollution.

·    Providing £2m of funding through a Nature Recovery Fund to support
environmental groups in delivering local environmental improvements.

 

In addition the company will commit to taking the necessary steps to address
the failures Ofwat has identified, securing its future compliance.

 

Lynn Parker, Senior Director for Enforcement at Ofwat, said:

 

"Water companies should be in no doubt that they will be held to account if
they fail to meet their legal obligations to customers and the environment.
Our investigation found a range of failures in how South West Water has gone
about managing its wastewater business. That is why we have secured the £24m
package and a commitment to put things right.

 

"As we continue to progress our sector-wide investigation, we are pleased that
companies, like South West Water, are stepping up to acknowledge their
failures and to put things right. We will continue to monitor the company to
ensure that this work is carried out as quickly as possible so that customer
confidence can begin to be restored."

 

South West Water has taken already taken some steps to address its compliance
issues. These include investment to investigate and improve the operation of a
range of its treatment works and storm overflows, and the introduction of new
governance arrangements to ensure greater oversight of its compliance with its
environmental obligations.

 

A consultation is now to the public and stakeholders to offer any final
comments on Ofwat's proposed decision before it is finalised. The consultation
can be found here: https://www.ofwat.gov.uk/consultations/
(https://www.ofwat.gov.uk/consultations/)

 

 

 ENDS

Notes for editors

·    You can find a link to the relevant enforcement documents here:
https://www.ofwat.gov.uk/regulated-companies/investigations/open-cases/enforcement-cases/
(https://www.ofwat.gov.uk/regulated-companies/investigations/open-cases/enforcement-cases/)

·    Ofwat can impose financial penalties of up to 10% of a company's
relevant turnover. In deciding whether to impose a penalty and the level of
that penalty, Ofwat will take account of the particular facts and
circumstances of the case under consideration to establish the appropriate
level of penalty to impose.

·    Had this enforcement package not been agreed, a penalty would have
been applied where the money would have been returned to the Consolidated Fund
operated by HM Treasury.

·    The £24m enforcement package Ofwat has secured is greater than the
penalty it would otherwise have imposed on the company (which would have been
£19m, 6.5% of South West Water's annual turnover).

·    Instead, the £24m will remain in the water sector and be spent on
making improvements to service for the benefit of South West Water customers
and the local environment.

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