The following is a response to a letter received by Severn Trent from a group of Midlands MPs. 

Thank you for your letter of 10 December to our Chief Executive, Liv Garfield, following the recent Panorama programme and the forthcoming Ofwat determination on the next price review period.

First of all, let me address Panorama. I can understand that you and your constituents could be concerned by the programme’s content, but I can assure you that the allegations made in relation to Severn Trent Trimpley were completely inaccurate. Unfortunately, the substantial evidence we provided was ignored. It is clear to us that their reporting was based on a fundamental misunderstanding of UK accounting standards and the regulatory framework in which we operate.

I would like to be clear that Severn Trent Trimpley is a financially responsible, legal and transparent structure that is, and always has been, fully in the public domain. It is a structure established to strengthen our financial flexibility and our confidence to make decisions that benefit customers and the environment. Due to our strong financial resilience, as called out by the industry regulator and credit rating agencies, we have been able to invest very significantly in infrastructure whilst minimising the impact on customer bills.

Meanwhile, I can assure you that as a listed and highly regulated business, we are always transparent and will continue to be fully transparent, open to scrutiny and challenge.

On the subject of river health, there is no doubt we need to do more. We, like our customers and many other river users, want to do so much more to improve river health. And we’re taking positive action faster than any other water company. We know we need to reduce spills from storm overflows and we need to do it as quickly as possible. To help us achieve this, we raised £1billion in additional equity from our shareholders, investors and employees, and earlier this year began work on a range of capital schemes to reduce spills from storm overflows at 900 locations. The work we have done, according to our preliminary analysis, has already helped to prevent 24,000 spills this year alone. Our teams have delivered an average of 7.5 enhancements a day since June, reinforcing our promise to go faster and further than anyone else to reduce spills.

This year, we will have our highest ever year of capital investment, at around £1.5billion. In terms of our investment, we are continuing to invest record amounts into the infrastructure that serves our customers. To add to this, since the start of 2020, we have made around £3 billion of capital investment to improve service for our customers, add further resilience to our network and benefit the environment. Typically, every year we invest four times more than we pay out to any shareholders in dividends. I can also confirm that any bonus that may or may not be awarded to our Chief Executive by our independent board does not come from customers, it comes from our investors and has no impact on bill levels or levels of investment

Next week Ofwat will make their final determination on our 2025-2030 investment plans – plans created with, and for, our customers. To achieve all the things our customers want means there will inevitably be an increase in customer bills over time. When the industry consumer body, the Consumer Council for Water (CCW), consulted on companies’ draft determination plans, there was an 81 percent acceptance rate for our proposed bill increases – the highest acceptance rate in the country. And despite the record levels of investment we’re proposing, we will ensure our customer bill will still be one of the lowest in the country by 2030. The £1billion equity raise I mentioned earlier has meant that we have been able to accelerate our investment plans at no extra cost to our customers.

But we absolutely know these are challenging times for many, which is why our plan is underpinned with an industry-leading financial support package. We’ll provide direct financial support to more customers than ever before – around one in six households across our region by 2030 – and we’ll continue our work to help thousands of people back into work through our free employability training programmes and by providing thousands of work experience placements and apprenticeships, as well as providing thousands of new jobs for people in your constituencies, through direct employment and our supply chain.

The onus is rightly on the water sector to deliver over the next five years.  It is a challenge that we are completely committed to addressing. We’ve listened and we’ll keep listening. Our customers are very clear on what they expect – and we are equally clear that we will deliver our plan and our promises as we continue to strive to be the best water company in the country – and beyond. 

In the spirit of collaboration and working together for the benefit our region, if I may I’d like to ask for your help in three areas:

• If you have constituents struggling with their water bills, we’d ask you to put them in touch with us as soon as possible. The sooner we know, the sooner we can help with discounts of up to 70 percent. 
• We welcome your support to ensure the 1.5 million new homes planned for the next five years are built in an environmentally sustainable way.  Our sewage networks generally have ample capacity for sewage; it’s large volumes of increasingly intense rainwater washing off urban areas that causes the lion share of the problem.  We’d like to see new developments built to the highest standards, including ponds and swales to capture rainwater, green roofs and even using rainwater for flushing toilets.  There may be little we can do about the existing housing stock, but there is much we can do to make new homes greener, more resilient and, ultimately, cheaper. 
• We’d love for you to come along to visit our people and see some of the work we’re doing in or near your constituency.  We want to listen to constructive challenge first hand, discuss matters honestly and also show you some of the fantastic work our front-line teams are doing to upgrade the network.

I am fully aware that it has been a turbulent time for the water industry, with the sector quite rightly, in the spotlight. I absolutely know we have lots of work to do to restore trust in us and we’re determined to do whatever it takes to achieve just that.