Ofwat confirms Severn Trent Water fine
Ofwat today confirmed that it has fined Severn Trent Water £35.8million for deliberately providing false information to Ofwat and for delivering poor service to its customers.
This breaks down as:
- £34.7 million (2.9% of 2006-07 turnover) for deliberately misreporting some key customer service information; and
- £1.1 million (0.1% of 2005-06 turnover) for providing sub-standard services to customers.
Ofwat Chief Executive Regina Finn said:
"Severn Trent Water's behaviour was unacceptable. The size of the fine reflects how seriously Ofwat takes the deliberate misreporting of information.
"This sends a clear message to the company and to the rest of the water sector – Ofwat will protect consumers and companies must comply with their legal obligations or pay the price. Any further attempts to deliberately mislead Ofwat could lead to even bigger fines in the future."
The obligations on the companies to provide reliable, accurate and complete data are designed to protect consumers in a monopoly environment. Without a choice of supplier, this protection is essential.
Severn Trent Water's shareholders will bear the entire cost of this fine. It will not be passed on to its customers.
Severn Trent responds to SFO court case
Severn Trent Plc announces that at the Central Criminal Court Severn Trent Water Ltd was fined £2 million and ordered to pay £220,000 costs after pleading guilty to two offences relating to leakage data supplied to Ofwat in 2001 and 2002.
Commenting on the court case and related legacy issues listed below, Tony Wray, Chief Executive of Severn Trent Plc, said:
"We are finally close to resolving these issues from the past and putting this organisation back into the positive position our customers, regulators and staff deserve.
"We deeply regret the mistakes of the previous regime for which we have apologised to customers. There were indefensible shortcomings in Severn Trent's previous management and control systems during the 2000 to 2004 era.
"On behalf of our customers and staff we deplore the breach of the essential trust between Severn Trent and all our stakeholders. We are already repairing that trust with the root and branch reorganisation of Severn Trent undertaken since 2005.
"Almost four years of intensive management time and effort has been spent sorting out these legacy issues – time better spent benefiting customers.
"No one who was responsible is with our organisation now and we have already ensured that Severn Trent did not profit from these failures by crediting customers' accounts and altering bills appropriately,” he concluded.
Having taken legal advice, and considered the best interests of customers and stakeholders generally, the Board of Severn Trent has decided not to take action against the former management.
Tony Wray said: “Severn Trent is now focused on our ambition – to achieve the highest quality of customer service standards while offering our customers the lowest prices.”
