Water services regulator Ofwat has extensively criticised South West Water in its annual report on the performance of water and wastewater companies in England and Wales.
The regulator said South West Water remained among the worst performing companies in the sector as it continues its enforcement case against the company for potential failures at sewage treatment works that may have led to sewage discharges into the environment.
The company fell further behind its targets during 2021-22, the period covered by the report, after its performance worsened compared with the previous year. It failed to deliver its commitments across five measures including pollution incidents, treatment works compliance and water quality.
The regulator highlighted South West Water’s “sustained poor performance over a number of years” across all pollution incident categories, saying the company was also “significantly below target on the number of serious pollution incidents”.
It added that it urgently needs to improve its performance in this area.
The company also reported the lowest treatment works compliance levels and the highest wastewater allowance underspend in the sector as it fell behind on service improvements that it was funded to deliver. It also spent less than half its infrastructure enhancement allowance.
David Black, Ofwat CEO, said the lack of investment was “extremely disappointing, especially in light of the poor performance for customers and the environment”.
South West Water was also the only company not to achieve a decrease in per capita water consumption.
The Environment Agency’s 2021 water company performance assessment, which the regulator incorporated in its report, placed South West Water at the bottom of its league table beside Southern Water and said the two companies’ performance was “terrible across the board”.
It criticized South West Water for continuing to perform “significantly below target” on most measures, and highlighted that the company had been responsible for persistently high numbers of pollution incidents during all eleven years since the agency’s annual water company environmental performance assessments had begun.
The number of serious South West Water pollution incidents in 2021 nearly tripled compared with the previous year.
In the decade to 2020, South West Water paid £1.1 billion in dividends, while averaging £163 million per annum in pre-tax profits.
Its parent company, Pennon Group, ended 2020-21 with a £3 billion cash surplus then paid out nearly £2 billion to shareholders.
Following South West Water’s poor performance last year the regulator decided that the company would have to return just £13.3 million to its customers – less than £7.39 per person.
