This is a notice of Ofwat’s intention to issue Southern Water with a financial penalty amounting to £37.7 million reduced exceptionally to £3 million for significant breaches of its licence conditions and its statutory duties. This is on the basis that Southern Water has undertaken to pay customers about £123 million over the next five years, some of which is a payment of price review underperformance penalties the company avoided paying in the period 2010 to 2017 and some of which is a payment to customers for the failures set out in this notice, paid in lieu of a penalty.
This notice sets out the details of Southern Water’s failings and how these have occurred. The failings relate to the management, operation and performance of its wastewater treatment works. These are vital assets that are used to clean and treat sewage (or wastewater) and which have a direct impact on the environment, particularly bodies of water, such as rivers or streams, into which treated wastewater is released.
We have concluded that Southern Water has deliberately misreported data to us about the performance of its wastewater treatment works. We have also concluded that it has failed: to have adequate systems of planning, governance and internal controls in place to be able to manage its wastewater treatment works; to accurately report information about the performance of these works; and to properly carry out its general statutory duties as a sewerage undertaker, to make provision for effectually dealing with and treating wastewater.
This notice follows a lengthy investigation which included a detailed request for information from Ofwat to Southern Water in June 2017, in which we highlighted our concerns about potential areas of non-compliance and possible contraventions of the company’s licence conditions and statutory obligations.
How to respond
Pursuant to section 22A(4) WIA91, Ofwat, in publishing a notice of a proposal to impose a penalty under section 22A(1) WIA91, is required to specify a period, of no less than 21 days from the date of publication of the notice, within which representations or objections with respect to the proposed penalty may be made. Accordingly, any such representations or objections should be made so as to be received by Ofwat by 5pm on 19 July 2019.
Representations should be sent to the following address:
OR by post to: Enforcement, Ofwat, Centre City Tower, 7 Hill Street, Birmingham, B5 4UA
We will publish copies of representations and objections we receive in response to this notice on our website, unless the person making them indicates that they would like their response to remain unpublished.