Southern Water hit with record penalty

Southern Water has been hit with a record penalty for ‘shocking’ failures in the way it carried out its business between 2010 and 2017.

Ofwat has fined the business £3 million and ordered it to repay £123 million in charges to its customers.

Rebate

The penalty – which is a record for the size of company – should give customers a rebate of £61 each.

Agreement has been reached that consumers will receive at least £17 in 2021 and then at least £11 a year for the following four years.

Criminal investigation

A criminal investigation has been launched into the circumstances which allowed spills of waste water from its sewage plants and an attempted cover-up.

Ofwat chief executive Rachel Fletcher said: “What we found in this case is shocking. The company was being run with scant regard for its responsibilities to society and the environment.

Poor operational performance

“It was not just the poor operational performance, but the co-ordinated efforts to hide and deceive customers of the fact that are so troubling.

“The previous management failed to stamp out this behaviour and failed to manage its plants properly. In doing so, Southern Water let down its customers and operated in a way completely counter to the public service ethos we expect.”

Investigation

The Ofwat investigation found that Southern Water failed to operate a number of wastewater treatment works properly, including not making sufficient investment to prevent equipment failures which resulted in the spillages.

It also found evidence that the firm manipulated its water sampling process to allow it to misreport information and thereby avoid penalties.

New management

The firm is now under new management and has been putting investment into the failing sites, but will need to report to Ofwat on the commitments it has made regarding new governance, accurate monitoring and reporting and changing its culture.

Said Ms Fletcher: “It is now for Southern Water, under its new leadership and with the improvements it is introducing, to show it has learnt from this unacceptable behaviour and can be trusted again.”

Deeply sorry

Southern Water chief executive, Ian McAulay, said: “We are deeply sorry for what has happened. There are no excuses for the failings that occurred between 2010 and 2017 outlined in Ofwat’s report.

“We have clearly fallen far short of the expectations and trust placed in us by our wastewater customers and the wider communities we serve. We are fully committed to continuing the fast pace of change delivered since 2017.

“There is a lot more work to do but we’re pleased that this proposal agreed with Ofwat enables us to fully make amends to our customers and regain their trust as quickly as possible.”

Job cuts

In separate news Southern Water has just announced it is to cut up to 200 jobs as it outsources its customer services to Capita which has offices in Rotherham and Bangalore.

Capita already handles Southern Water call centres and has signed a £30 million five year deal to handle other roles including billing and customer correspondence.

Upset, shocked and angry

Southern Water staff at offices in Sussex have been told their roles could be moved to either Yorkshire or India# and Unison representative Caroline Fife said they were ‘upset, shocked and angry.’

he added: “Given the short timescale they want to know what is going to happen, when, and what money they will receive so they can plan their lives.”

The firm says the moves are necessary to make its service ‘fit for the future’ and at the same time ‘keeping bills affordable’.