Ofwat has today confirmed that Southern Water has completed all the enforcement actions resulting from its 2019 investigation into the company.

Southern Water has met its commitments from Ofwat’s original 2019 investigation, including completing over 1,000 actions across 293 wastewater treatment works.

Ofwat says the company must now go further and has committed to additional undertakings to develop and deliver a plan that will secure its compliance with wider wastewater obligations.

Actions the company was required to take following the regulator’s 2019 investigation included:

• Completing a technical review of environmental permit compliance across all 293 wastewater treatment works. This uncovered more than 1,000 actions which have now been completed.
• Completing the works required to return 118 wastewater treatment works to compliance in line with environmental permits. This included completing work to ensure all storm tanks at wastewater treatment works are of the required capacity.
• Embedding routine inspections of all relevant wastewater treatment works into its business-as-usual practices.
• Improving the accuracy of its spills reporting, improving the coverage of storm overflow monitoring (EDM), ensuring greater visibility of spills by the company.
• Completing organisational cultural changes, including an annual review of incentive schemes for executives and senior management to ensure they do not drive inappropriate behaviours with respect to compliance.

The actions saw £126 millions paid in redress and penalties by the company, alongside improvements to the operation of its wastewater treatment works and its compliance and governance processes.

Southern Water’s shareholders had already committed £11.5 million of targeted investment towards the types of improvements needed, in addition to wider work within the company’s business plans. Following Ofwat’s latest assessment, an additional £2 million of shareholder funding will be provided bringing investment to a total of £13.5 million for work that will be completed by 2030. None of the money will be funded by customer bills.

"Financial penalty is not warranted in this case"

However, Ofwat has concluded that imposition of a further financial penalty is not required - the decision document states:

"Having considered all the relevant factors in our Statement of Policy and the specific context of Southern Water's compliance journey, and wider performance turnaround, during the period of the 2019 Undertakings we have decided that a financial penalty is not warranted in this case."

Having considered all the relevant factors in our Statement of Policy and the specific context of Southern Water's compliance journey, and wider performance turnaround, during the period of the 2019 Undertakings we have decided that a financial penalty is not warranted in this case.

Ofwat’s latest assessment of Southern Water’s compliance has confirmed that whilst it has met the commitments made in 2019, it now needs to go further in areas that were not a focus of the previous investigation to fully meet the standards that the law sets out.

The money will include a contribution of £2 million to support wetland restoration at Nursling, Southampton and a £5.5 million investment in Southern Water’s sewer level monitor programme.

Southern Water has committed to additional undertakings that will bring it into compliance with these standards.

The company will now develop and deliver a remediation plan to complete the outstanding work required. 

The further commitments will bridge the gap between Ofwat’s original investigation in 2019 and its current wastewater investigation, which is looking into all wastewater companies in England and Wales.

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

“While we are pleased that Southern Water has completed the work resulting from our previous investigation, the company must now continue this journey to secure its wider compliance, as set out in these further commitments.

“Ofwat understands that the public wants to see transformative change. That is why we ensure companies deliver on the work they commit to as part of our enforcement decisions, as we have done in this case with Southern Water. This is just one of the ways we are holding companies to account and ensuring that they meet their obligations.”  

Click here to download Notice of Ofwat’s decision to accept section 19 undertakings from Southern Water Services Ltd