EA Case: An open letter from our Chairman, Keith Lough

Southern Water has let its customers down.


Over the period from 2010 to 2015, illegal sewage spill incidents occurred which resulted in an Environment Agency prosecution and the £90 million fine we received last Friday.

What happened during this time was completely unacceptable and we pleaded guilty to the charges in recognition of that fact.

The reality is that Southern Water did not meet the expectations of the customers we exist to serve. We failed to protect our precious environment in southern England. For that we are profoundly sorry and as we have made clear, our customers will not pay a penny towards our fine.

As Chairman of the company since 2019 I do feel this deeply.

I joined Southern Water because I wholly supported and wished to be part of the transformational changes that the new executive leadership was bringing to the business. Ian McAulay joined as Chief Executive in 2017 and immediately set about appointing an entirely new leadership team, delivering root and branch changes to the culture, governance and delivery capabilities of the business.

Since then, the Board and senior leadership have thought long and hard about the kind of company we want Southern Water to be and how we wish to be viewed by our customers, the communities we serve, our regulators and our staff and delivery partners.

It has been a process of deep and necessary cultural change, with measures put in place to completely overhaul our operations. As a result, I am in no doubt that Southern Water is now a very different company.

On governance, we have a new Code of Ethics, have revised our company values, put in place a modern compliance framework and enhanced whistle-blowing procedures.

On environmental performance we are leading the way in our sector when it comes to absolute transparency. Our company website now alerts people to pollution incidents, flow and spill reporting, wastewater treatment works compliance, regional bathing water compliance results, emissions and river levels. We believe that openness and transparency will bring wider stakeholder engagement and lead to the design and delivery of the kind of changes that our customers and communities want. We want these changes too.

We provide essential services and, at our heart, are both an environmental and a customer service business. Our absolute priority is to put the environment front and centre in everything we do. If we continue to do this, we believe we can rebuild trust with our customers and stakeholders. Our ambition is that by 2025 we will ensure our operations cause no serious pollution incidents affecting local rivers, streams and beaches.

Regaining trust takes positive action and will take time. It depends on improving our performance as a business, taking a zero-tolerance approach to pollution and leakage, and continuing to overhaul the way we operate. It does also depend on securing the vital investment, beyond our regulatory determinations, to match our environmental ambitions.

Securing additional investment to deliver for Southern Water customers is critical to underwriting our commitments so I am delighted to confirm that an additional investment programme of £230 million, brought forward by our Executive team, has just been approved by the Board.

This follows the approval of £144 million of improvement business cases last year. Furthermore, the confidence built by improvements in systems and delivery capability in the last few years has also meant the Board has approved the Executive’s request to accelerate £60 million of spend from future years into this year.

In total that means approaching half a billion pounds of accelerated and additional investment committed, adding to more than £3.5 billion of expenditure already committed in our business plan. That will be good for customers and the environment and will enable completion of the transformation of Southern Water, begun in 2017.

Southern Water has so many excellent staff who day-in and day-out work hard for our communities and the environment and I believe that we do all understand what doing the right thing actually means. While I am sorry for what has been, it makes me no less proud of how far we have come since 2017 and even more determined that we deliver on our new commitments to our customers, the environment and economy of the south east.

Chairman's signature

Keith Lough

Published: 14 July 2021