OFWAT has unveiled a proposed £24-million enforcement package against South West Water (SWW), following its discovery that the company has repeatedly failed to meet its legal duties in managing its wastewater treatment works and sewer network.

These failures have led to unlawful discharges of wastewater into the environment.

This action marks the continuation of Ofwat's broad and multifaceted investigations into the wastewater management practices of water companies across England and Wales. Earlier this year, they concluded enforcement cases against Yorkshire Water, Thames Water and Northumbrian Water, resulting in combined enforcement measures exceeding £160-million.

The watchdog’s investigation into SWW revealed shortcomings in the design, management and operation of its wastewater treatment works and sewer systems. Crucially, the company lacked robust management systems and sufficient oversight from its senior leadership and board to ensure compliance with its environmental and legal obligations.

In response, SWW has proposed a firm enforcement package totalling £24-million during the current price control period (2025–2030). The measures include:

· Investing £20-million 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 £2-million local fund to tackle sewer misuse and misconnections, which can contribute to environmental pollution.

· Providing £2-million 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.

Furthermore, SWW has committed to a range of internal reforms aimed at restoring compliance and preventing future failings, including governance overhauls and operational enhancements.

Ofwat’s senior director for enforcement, Lynn Parker, commented: “Water companies should be in no doubt they will be held to account if they fail to meet their legal obligations to customers and the environment. Our investigation found a range of failures in how South West Water has gone about managing its wastewater business. That is why we have secured the £24-million package and a commitment to put things right.”

SWW has already launched initial remedial efforts, including raising investment levels to improve the operation of wastewater treatment works and storm overflow systems. It has also introduced new governance structures to ensure enhanced senior management and board-level scrutiny of compliance performance.

Susan Davy, CEO for South West Water, said: “We are pleased Ofwat has completed its review into wastewater as part of its sector wide investigation. For us this related to historical issues. I have always said that when things go wrong, it’s how we respond and put things right, and that is exactly what we are doing.”

She added the £24-million package complements a wider £760-million investment over the next five years to reduce storm overflows and improve water quality as part of South West Water’s broader £3.2-billion investment programme.

Had this enforcement package not been agreed, a penalty would have been applied where the money would have been returned to the Consolidated Fund operated by HM Treasury.