Severn Trent facing criminal chargesAllegations concern false leakage data

22 November 2007

a tap with water flowing

Planning ahead is key to meeting demands

Water company Severn Trent is facing criminal charges over allegations it gave false information to the industry regulator.

The Serious Fraud Office (SFO) is to charge the company with three offences relating to leakage data supplied to Ofwat between 2000 and 2002.

The charges follow a two-year investigation into Severn Trent, which serves more than 8 million customers across the heart of the UK, stretching from the Bristol Channel to the Humber, and from mid-Wales to the East Midlands.

Ofwat data

Tony Wray, Chief Executive of Severn Trent, said: ‘The new board has co-operated fully with the SFO during the investigation. 

‘We will now study carefully the details of the charges which relate to the responsibilities of a previous regime.  Until that process is completed and we have taken legal advice, we cannot comment further on our response to the charges.’

Mr Wray added: ‘What I can say is that this new board and management team has taken, and will continue to take, all actions we think appropriate to ensure the maintenance of both high ethical and professional standards and resilient and effective controls throughout our organisation.’

All water companies have to provide Ofwat with data about a wide variety of activities including levels of customer service, additions to their networks, and leakage.

SFO investigation

Ofwat then uses this data to determine how much a company can charge its customers.

The SFO began its investigation in October 2005 after Ofwat raised concerns about the reliability of the data supplied to it by Severn Trent.

Ofwat had already been conducting its own investigation after a Severn Trent employee contacted it in 2004 with allegations of reporting irregularities.

Customer refunds

Ofwat's interim report in March 2006 found that Severn Trent had tried to overcharge its 8 million customers by £42 million.

The water company apologised to customers and returned the money by crediting customers' accounts and reducing future tariffs.

But Severn Trent acknowledged today that the regulator ‘may expect further amends to be made to customers’.

Last week, Ofwat announced that it intended to fine another water company, Southern Water, £20.3 million after it 'deliberately misreported' its customer service performance to the regulator.