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  1. ITV Report

Southern Water hit with record £126m package of fines and customer rebates

  • Video report by ITV News Consumer Editor Chris Choi

Southern Water has been hit with a record £126 million package of fines and customer rebates after "serious failures" in its sewage treatment sites and deliberately misreporting its performance, regulator Ofwat has announced.

Customers of the utility company will now receive rebates of £61 over the next five years after Southern Water agreed to the package, which, given the size of the firm, is the largest the regulator has ever imposed.

Ofwat said its large-scale investigation found Southern Water failed to operate a number of wastewater treatments works properly, including by not making the necessary investment, which led to equipment failures and spills of wastewater into the environment.

It added that Southern Water also manipulated its wastewater sampling process, which led to it misreporting information to the watchdog and avoiding penalties.

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."

Southern Water operates Bewl Water reservoir near Lamberhurst in Kent. Credit: PA

Southern Water will refund £123 million to customers through their bills and pay a fine of £3 million.

The rebate includes £91 million in penalties Southern Water had avoided and a further £32 million of payments as recognition of its serious failures.

The package was reduced after Southern Water co-operated with the watchdog.

Ofwat's Ms Fletcher added: "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.

"It is now for Southern Water, under its new leadership, and with the improvements it is introducing, to show it has learnt from this unacceptable behaviour and can be trusted again."

The Environment Agency is now investigating Southern Water and the environmental impact of its actions.

Southern Water apologised and outlined how customers would receive £17 off their bills in year one, followed by £11 a year for the next four years.

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Ian McAulay, Chief Executive at the company, said: "We have fully supported these investigations and completed our own internal review, which has highlighted failures of people, processes and systems during that time.

"We are profoundly sorry for these failures and have been working very hard to understand past failings and implement the changes required to ensure we better deliver for our customers and meet the standards they deserve."