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Southern Water customers to each get £61 rebate following ‘shocking’ failings

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25/06/2019
Southern Water is to pay a record £126m in fines and rebates to customers following ‘serious failures’ in the operation of its sewage treatment sites and for deliberately misreporting its performance.

The payment package – the biggest ever imposed by Ofwat – will see Southern Water pay a rebate of £123m to customers through their bills and a fine of £3m.

Customers should expect a rebate on their bills of £61, with £17 in 2020/21 and £11 in each of the following four years.

What happened?

A large-scale investigation into the water company by Ofwat found that Southern Water failed to operate a number of wastewater treatments works properly.

The regulator also said Southern Water manipulated its wastewater sampling process which resulted in it misreporting information about the performance of a number of sewage treatment sites. This meant the company avoided penalties under Ofwat’s incentive regime.

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

“Today’s announcement should also serve as a reminder to all other companies about the gravity of their responsibilities to society and the environment and that we will take action if they neglect them.”

Ofwat said the fine would have been larger had Southern Water not co-operated with its investigation, addressed its failings and agreed to the payment package.

Southern Water appointed a new chief executive in January 2017 and there have been substantial changes to the company’s management team following this.

Southern Water’s response

Ian McAulay, Southern Water’s chief executive, 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.”

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