Ofwat has found Severn Trent to have had serious failings in its duties to deal effectively with wastewater and sewage – but the regulator has opted not to impose a financial penalty in this case.

This concludes the eighth case in Ofwat’s sector-wide wastewater investigation launched in 2021 which has so far secured enforcement packages and fines of more than £300 million - two cases currently remain open.

Announcing its decision, Ofwat said Severn Trent had proactively identified problems and shareholders invested £98 million towards fixing the issues — before Ofwat opened its enforcement case.

Ofwat has formally accepted an enforceable package of undertakings from the water company to ensure the company returns to compliance.

Ofwat’s investigation found that Severn Trent Water breached its duties, failing to effectually provide drainage and deal with the contents of its sewers. The company was also found to have historically breached requirements of its licence to have in place adequate processes and systems to meet those duties. While it now has the right processes in place, the company is required to rectify all outstanding issues and ensure future compliance with regard to their network.

Ofwat said that in contrast to the seven preceding cases, Severn Trent Water had proactively identified problems in its own network and began putting them right before Ofwat opened an enforcement case against the company in July 2024.

The regulator explained:

“The company’s shareholders have already invested £98 million in direct infrastructure improvements because the company recognised its obligations and acted on them. From the outset of the investigation, Severn Trent Water cooperated fully and was able to evidence both its failures and the concrete steps it has taken and will take in future to address them.

“Severn Trent Water has taken ownership of the problem, has been proactive in identifying and addressing issues with its wastewater assets and ambitious in its approach, with visible benefits already being in place.”

The £98 million of shareholder-funded investment has included additional capacity at 65 wastewater treatment sites, Flow to Full Treatment and storm tank enhancements, increased storage at storm overflows, and £26 million of nature-based solutions in the Mansfield area. “This forms part of an ambitious spills reduction programme launched in 2024 which will take them beyond current licence requirements,” Ofwat said.

Ofwat - "41% reduction in spills we are now seeing is what genuine accountability looks like in practice"

Ofwat said the impact of this investment is clear in the data: the company achieved a 41% year-on-year reduction in spills per storm overflow in 2025 (compared to the same data in 2024), despite experiencing heavier rainfall than some other regions, and has been a consistent higher than average performer on this measure throughout the investigation period.

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

“Our investigation found serious and unacceptable breaches by Severn Trent Water — that is not in question and the company accepts it. But their response to those failures sets a standard we expect from all companies: identifying the problem, proactively investing to fix it, and cooperating openly with the regulator.

“The 41% reduction in spills we are now seeing is what genuine accountability looks like in practice. We will always act where companies fail their customers and the environment. But we will also be clear, publicly, when a company does the right thing.”

Ofwat found that Severn Trent were consistently performing better in the average number of spills per storm overflow compared to the industry spills average. Ofwat also found that the quality of Severn Trent’s data regarding its Event Duration Monitoring operation was significantly higher than the sector average.

Severn Trent said the outcome reflects the company’s response to the findings, which Ofwat acknowledges “sets a standard expected from all companies.”

The company has accepted the breaches identified, pointing out that its proactive approach to investing in wastewater assets prior to the opening of the enforcement case had been recognised and that Ofwat had also acknowledged the company’s strong Board oversight as well as its operational controls.

Severn Trent said it had prioritised monitoring of storm overflows over ten years ago during AMP6 and in 2023 committed to invest £450 million by 2030 as part of its 'Spills Reduction Programme' to upgrade storm overflows and storage capacity across its network. By 2030, the utility expects to reduce average spills per storm overflow to below 14 per year and has an ambition to go further.

Severn Trent CEO says "we still have work to do"

James Jesic, Chief Executive, Severn Trent Plc, said:

"We're delivering a significant storm overflow spills reduction programme and Ofwat has recognised this in today's decision.

''We accept Ofwat's findings relating to issues that we proactively identified and began addressing these before the enforcement case was opened. By monitoring and investing early to put things right, we are now seeing the benefits, including reducing average storm overflow spills by 41% in 2025.

"Our investment programme in spills reduction continues across our region at pace with the strength of our whole organisation and supply chain behind it. We still have work to do and remain absolutely focused on delivering further improvements for our customers and the environment.''