Ofwat proposes £35.8m fine

Severn Trent Water is facing a £35.8m fine for deliberately providing false data to industry regulator Ofwat and poor customer service. The amount is equal to three per cent of the company’s turnover.

Ofwat proposes that Severn Trent Water misreported some of its customer service data to hide its true performance in 2005. It believes this damaged ability to regulate the water sector effectively and protect customers.

Shareholders will bear the entire cost of the proposed penalty. The fine breakdown includes £34.7m, 2.9 per cent of turnover in 2006-7, for deliberately misreporting key customer service information. A further £1.1m, 0.1 per cent of turnover in 2005-2006, is for providing sub-standard services to customers and failing to meet guaranteed standards of service.

Ofwat chief executive Regina Finn said: ‘In a monopoly industry where the majority of customers have no choice of supplier, the only protection customers have is from the regulator.’

Severn Trent Water chief executive Tony Wray said: ‘We fully acknowledge and accept that the company is responsible for its failures. Now that we have received the notices from Ofwat setting out the proposed level of penalties and the reasons for them, we will carefully consider them and will respond appropriately.’