Ofwat announced last week that:
Ofwat has today (10 July 2025) proposed a £24m enforcement package following its findings that South West Water has failed to meet it legal obligations in managing its wastewater treatment works and network. These failures resulted in the company spilling wastewater to the environment when it should not have done.
This announcement represents the next stage of Ofwat’s largest and most complex set of investigations into all water companies and their management of their wastewater treatment works. It follows the conclusion of cases against Yorkshire Water, Thames Water and Northumbrian Water earlier this year that resulted in enforcement action worth more than £160m.
Ofwat’s investigation found that South West Water has failed to build and operate its wastewater treatment works and sewer networks to ensure they performed sufficiently. The company did not have in place adequate management systems to ensure it was meeting its legal obligations in this regard, including adequate oversight from its senior management team and Board.
In stepping up to acknowledge what has gone wrong and how it will put things right, South West Water has proposed a £24m enforcement package which includes:
- Investing £20m during 2025-30 to reduce spills from specific storm overflows. This investment will target overflows in environmentally sensitive areas or within focused community areas.
- Establishing a £2m local fund to tackle sewer misuse and misconnections, which can contribute to environmental pollution.
- Providing £2m of funding through a Nature Recovery Fund to support environmental groups in delivering local environmental improvements.
In addition the company will commit to taking the necessary steps to address the failures Ofwat has identified, securing its future compliance….
South West Water has taken already taken some steps to address its compliance issues. These include investment to investigate and improve the operation of a range of its treatment works and storm overflows, and the introduction of new governance arrangements to ensure greater oversight of its compliance with its environmental obligations.
A consultation is now to the public and stakeholders to offer any final comments on Ofwat’s proposed decision before it is finalised. The consultation can be found here: https://www.ofwat.gov.uk/consultations/
More details about the enforcement package can be found in the case summary:
In February 2025, we shared a confidential minded-to decision with South West Water as part of our informal ‘minded to’ process, outlined in our Statement of Policy on financial penalties.
Our minded-to decision concluded that South West Water has contravened:
- Regulation 4(4), Regulation 4(2) and Schedule 2 of the Urban Waste Water Treatment (England and Wales) Regulations 1994 (UWWTR) by failing to operate and maintain its wastewater assets adequately, and to upgrade them where necessary, to provide sufficient performance. It has also failed to put in place adequate processes and systems to routinely monitor and maintain the capacity and performance of its assets to ensure they were meeting legal requirements.
- Section 94 Water Industry Act 1991 (WIA91) by systemically contravening its UWWTR duties and failing effectually to provide drainage and deal with the contents of its sewers.
- Condition P12 of its licence, which requires it to have in place adequate resources and systems of planning and internal control to carry out its legal obligations, by failing to put in place adequate processes to identify and address emerging and present compliance risks effectively, to ensure that its data gathering and analysis were fit-for-purpose and to ensure that its Executive and Board received and/or sought sufficient information and assurance on the company’s operational performance.
In response to our minded-to decision, South West Water put forward proposed undertakings under section 19 of the WIA91, setting out details of steps it will take to address the non-compliance we have identified and secure future compliance. The undertakings also set out details of a proposed redress package to recognise the failures our investigation found.
South West Water has provided undertakings under section 19 WIA91 that will see it commit to investing an additional £24 million to improve the quality of the environment in its region and further reduce spills. This will be entirely funded by the company and its shareholders rather than customers. South West Water has also committed to developing and delivering a series of action plans that will address the contraventions we have identified and bring it back into compliance with its obligations.
