Southern Water customers are set to receive a £123m bill rebate as part of a £126m package agreed with the regulator.
It comes after an investigation by the regulation body Ofwat has found that, between 2010 and 2017, some of Southern Water’s waste water treatment sites were manipulated by staff to pass sampling tests they otherwise might have failed.
As well as a £3m fine, Southern Water will pay a rebate of £123m to customers over a five-year period.
The rebate will be at least £17 per customer to be rebated in 2021, and at least £11 per year for the following four years, Southern Water said.
Customers will bear none of the costs of the proposed fine or rebate, the company confirmed.
Ofwat said that, proportionate to the size of the business, the package of penalties and payments was the biggest it had ever imposed.
The company has said it is ‘deeply sorry’ for the past failures and said it was ‘fully committed’ to continuing to improve its business.
Reaction to the news
Politicians from across Sussex have responded to the announcement from Ofwat today.
Caroline Lucas, MP for Brighton Pavilion, said the fine was ‘long overdue’ and called for water companies to be brought back into public ownership.
She said: “Water is the most basic human necessity yet we’ve handed over control of it in England to private equity companies who are showing contempt for the customer and the environment.
“Southern Water was the worst performing water company for years and this record fine is long overdue.
“The list of failings is truly shocking: badly maintained equipment, raw sewage dumped in the environment and covering it up with a series of lies for seven years.
“Yet all the while, it was paying its then chief executive more than £700,000 a year and handing out millions to shareholders.
“It’s time to stop running our water companies for profit. Privatisation has failed.
“We should bring the water companies in England back into public ownership – for the sake of customers and the environment.”
Peter Lamb, leader of Crawley Council and Parliamentary Candidate, said: “Penalties won’t undo the damage Southern Water has done to our natural environment.
“This flagrant disregard for the impact toxic water can have on the places where we and our families live underlines once again that our privatised water system exists to generate profits for shareholders and not to serve the needs of communities. Enough is enough.”
Rebecca Long Bailey, Shadow Secretary of State for Business, Energy and Industrial Strategy, said: “Today’s eye watering fines and forced customer rebates demonstrate clearly just how broken our water system is.
“Despite failures, chronic underinvestment and exorbitant customer bills, many water companies continue to pay out hefty dividends to shareholders.
“Instead of profit using dividend extraction over investment and quality of service, Labour will ensure our water companies are run for the benefit of us all by lowering bills and investing in our infrastructure.”