Southern Water hits out following performance review

Southern Water has been told to make urgent improvements following a performance review.

The warning from the Environment Agency comes after a series of pollution incidents.

Southern scored two out of four points in the latest review.

Southern Water’s CEO, Lawrence Gosden, said:  “These reports draw on data from last year, and as far back as January 2024. We acknowledge that our regulators want to see our performance improve, and we share that ambition. But we’re making clear progress in many areas – so the reports out today don’t tell the whole story.  

“With the commitment of our amazing people and the strong support of our shareholder, all of us at Southern Water are determined to serve our customers and the environment better -- and we’re on track to achieve that.”

Since Southern Water launched a turnaround plan in April 2023, this set of short, sharp actions to deliver real change by spring 2025, has achieved a range of improvements, including, this is what they say has been taking place: 

• Overall pollution incidents have reduced by 30%  
• Internal sewer flooding incidents have fallen by 40% 
• Drinking water quality compliance score up by 40%
• Last year we reduced leakage by a record 18.5% 

• Meanwhile, investing £1.5 billion into Clean Rivers and Seas Plan to cut storm overflow releases, in line with the Government’s commitment to see them halved by 2030. Across our region, 84% of bathing waters are rated Good or Excellent - 20% higher than the UK average – and we are now going further, faster.  

• To deliver this progress at pace, spending £1.5 billion more than the 2020–25 budget agreed by Ofwat, resulting in record capital investment – £977 million in 2024/25 alone. While this led to operating losses for three consecutive years, it enabled critical upgrades, including a new 24/7 Control Centre, the installation of 32,000 digital sewer monitors, and drainage projects designed to beat our storm overflow reduction target.  

• Strong shareholder backing funded these improvements, not customer bills. £1.65 billion of equity has been committed since 2021 and a further £655 million was announced earlier in the summer. No dividends have been paid to external shareholders since 2017 and none are expected until 2030 at the earliest, and our majority shareholder has invested more since 2021 than has ever been paid out in dividends since the company was founded in 1989.  

• Our 2025–30 Business Plan, shaped by feedback from thousands of customers, outlines £8.5 billion of investment in the areas the areas our customers have told us matter most: improving environmental performance, enhancing service reliability, and upgrading essential infrastructure 

• Our EPA has remained stable at 2-stars. We continue to target a three-star EPA rating – and are working with our regulators as they develop a new rating system which will come into effect in 2027