Southern Water and Portsmouth Water 'lagging behind expectations', says regulator Ofwat

The regulator criticised Southern Water alongside Northumbrian Water, South West Water, Thames Water, Welsh Water and Yorkshire Water, saying the water authority was ‘deeply concerned by those that are lagging behind expectations’.

The firms must now explain the cause of their poor performance and present an action plan to improve their results, Ofwat said, as it published its annual assessment of company operational performance.

Most companies had ‘again failed to clearly explain the link between their dividend decisions and payments with performance delivery for customers’, according to Ofwat.

In a written statement, a representative from the regulator added: ‘In particular, both Northumbrian Water and Portsmouth Water fell short of our expectations when considered in the context of the level of dividend they paid, which was significantly higher than our base expectations, and their relative financial resilience.’

Portsmouth City Councillor Steve Pitt, cabinet member for culture, leisure and economic development said ‘it is no surprise that Southern Water are on this list’.

He added: ‘Every day that they continue to pump sewage into Langstone Harbour, and our coastal bathing waters, is an affront to our communities and the environment. I hope that we will finally see meaningful action to hold them to account.’

The company’s own CEO, Lawrence Gosden, who was came into post in July, said that the firm’s performance in the last financial year ‘was not good enough’ – but praised its performance as he came on board.

He said: ‘Our performance in the last financial year was not good enough, however in the subsequent nine months we are seeing strong evidence of improvement.

‘With a new majority shareholder, we are now spending £2bn between 2020 and 2025 to deliver real change for the benefit of both our customers and the environment.

‘We have reduced pollution incidents by almost 40 per cent year-to-date, and will reduce 80 per cent of our pollution incidents over the next three years.’

The CEO warned that efforts to improve the company’s track record would ‘not all be felt immediately’.

He said: ‘We will continue to be fully transparent, reporting regularly on progress. Customers should also be reassured, our debt has been reduced, our structure simplified and our resilience increased.

‘We are also investing the money where it’s needed - no external dividends have gone to shareholders since 2017.’

Last month saw the latest in a long line of protests targeting the company, as dozens of protesters gathered outside Southern Water’s water treatment plant in Havant, with the crowd demanding more action on sewage discharges and a public meting with company representatives.