- £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/
ENDS
Notes for editors:
- 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.
