Ofwat has today proposed a £24 million 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.

Announcing the proposal, the regulator said that as part of the enforcement package, South West Water has recognised its failures and is taking steps to put it right.

The 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 £160 million.

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 £24 million 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 also commit to taking the necessary steps to address the failures Ofwat has identified, securing its future compliance.

A consultation will now follow which will be open for the public and key stakeholders to offer any final comments before Ofwat’s final decision.

Lynn Parker, Senior Director for Enforcement at Ofwat, said:

“Water companies should be in no doubt that 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 £24m package and a commitment to put things right.

“As we continue to progress our sector-wide investigation, we are pleased that companies like South West Water are stepping up to acknowledge their failures and to put things right. We will continue to monitor the company to ensure that this work is carried out as quickly as possible so that customer confidence can begin to be restored.”

The water company 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. Deadline to comment is 5pm on Sunday 3 August 2025 - click here to access the consultation online