South West Water: Performance

Richard Foord Excerpts

Tuesday 28th February 2023 Westminster Hall

[Richard Foord (Tiverton and Honiton) (LD)]

It is a pleasure to serve under your chairmanship, Sir George, and I congratulate the hon. Member for East Devon (Simon Jupp) on his contribution.

Like other Members, I received an email ahead of the debate from Pennon Group, which owns South West Water. It reads:

“We wanted to provide you with the most recent information so that you are able to have an informed debate”.

Although that could be thought of as an act of kindness on the part of the water company and Pennon Group, I for one would rather be informed by what my constituents are writing to tell me about than by what a lobbyist suggests I should think. I will be informed by constituents and bill payers.

Since my election last June, the comments and complaints have flooded in. We have heard that South West Water has permitted sewage to flood out on to our beaches and into our rivers. I am pleased that the Minister is present, because I want her and South West Water representatives to hear about some of my constituents’ experiences.

Just this month, an Axminster constituent wrote to me:

“I’d like to know why our water bills are going up when SWW are performing so badly and why it’s okay for the CEO to get such massive bonuses. We don’t get to choose our water supply like we do for other utilities and SWW has been given a free pass to rip us off. We’ve been told for years our bills are high because of ageing pipes and the size of our coastline, so why did the CEO of SWW get such a large bonus when we have such high bills?”

A second constituent wrote to me in January, after the cold snap, to explain how their access to water had been disrupted by burst water pipes. The constituent, who is from Seaton, wrote:

“I simply have to write to express my disappointment and disgust over the lack of care and co-operation shown by South West Water. If SWW are serious about customer care and ‘saving every drop’ then SWW would be making more of an effort to actually monitor those leaks which are reported to them but they are not responsible for. As a paying customer all we ever seem to get from the SWW leak team is ‘It’s not our problem.’ Surely you have a duty of care for your paying customers?”

Those are just samples of the correspondence that I have received from constituents, as I am able to bring only a few examples to bear today, but I will add one more. In December, a constituent from Beer wrote:

“Why is it that South West Water is able to charge rates that provide for update and maintenance of the sewers and drains and yet only spend 37% of their allocated budget on doing this? Is it because Pennon used some of this budget to return over £1 billion to shareholders last year? When will the government get to grips with the individuals running the water companies and pass legislation to stop the destruction of the environment from the continual discharge of untreated sewage, even in dry conditions?”

All this shows the huge discontent among our constituents, who have simply lost faith in South West Water’s ability to properly deal with the situation at hand. We are seeing sewage dumped in our rivers and on our beaches over thousands of hours, putting at risk not only the health of the public but our wildlife and biodiversity. The scale of the problem should not be understated. People feel that they are being ripped off by a company that continues to hike bills but pays out huge bonuses and large shareholder dividends while it fails to perform even its most basic functions effectively. It is clear that the company is not being run for the benefit of south-west communities and that the current regulator, Ofwat, lacks the teeth to properly police its actions.

We heard from the hon. Member for East Devon that the regulator has some teeth. If that is true, the Government permit them to be kept in a glass on the bedside table. The company is not being run for the benefit of our constituents. My message to South West Water is simple: fix the problems, focus on delivering a quality service for our constituents, and do not pat yourselves on the back for a job done so shoddily.

[Anthony Mangnall (Totnes) (Con)]

I congratulate my hon. Friend the Member for East Devon (Simon Jupp) on leading the charge for Devon MPs by raising this matter with South West Water and Ministers. He has ensured that we are up to date about what is going on and what needs to be done to address this issue.

I start from a position that so many of us share across the south-west and, indeed, the whole country: we suffer under an antiquated, Victorian-era system that needs to be modernised and improved quickly. We need to encourage our water companies to offer us not just words and reports, but meaningful action on the ground. It is with huge disappointment that I follow the hon. Member for Tiverton and Honiton (Richard Foord), who did not offer a single suggestion as to what water companies can actually do.

[Richard Foord]

Will the hon. Gentleman give way?

[Anthony Mangnall]

The hon. Gentleman has had his chance to give his speech.

In the course of my remarks, I will point out some of the flaws, but also some of the things we expect water companies to be doing in our constituencies. I hope South West Water and all other water companies will be listening to the debate, because today we can set the standards. Today we can set out our knowledge of what is being done across the country, and ensure that the standards are in place, and that the fines and action are taking place.

Where is South West Water to date? It is absolutely right that it has met its mains repairs and unplanned outage performance commitment levels; it is absolutely brilliant to hear that it was the top performer for internal sewer flooding performance; and it is quite welcome to hear that its sewer collapse performance and prevention was better than its commitment. Those are all welcome steps, but it is not just about recognising successes: it is about seeing the failures, talking about them and seeking to address them, and it is absolutely right that we talk about those failures today.

The first failure is that water supply interruption performance targets were not met. South West Water also did not meet the deadband score for the compliance risk index, which measures the risk of companies not meeting the requirement of drinking water quality regulations. Perhaps most egregious of all, South West Water’s pollution incidents performance was the second poorest in the country. The company has a customer satisfaction rating that is 78.4% poorer than the median of other water companies—it is ranked with one star. If we are concerned by the actions South West Water is taking, we should also be concerned about how it is viewed by the public. We must ensure there improved confidence in water companies to address and tackle the issue with meaningful results to ensure we see improved water systems, cleaner waterways, enhanced monitoring, and meaningful action from the ground up to enhance wildlife biodiversity.

According to the email we received from South West Water, which by all means is not the only source of information sent to Members of Parliament ahead of the debate—in fact, there was a great deal more—we should reflect on the fact that South West Water has delivered on 80% of its 44 operational delivery metrics and is now looking towards 100% monitoring, but although it talks about bathing water status, it does not necessarily go far enough on our rivers. The company talks far more about keeping our beaches clean, when many of us who are wild water swimmers, such as myself, like to swim in rivers all year round and are deeply concerned about the monitoring systems that are in place.

South West Water has invested billions of pounds over the last two decades to protect and enhance the rivers and coastal waters of the region, but the problem is that people do not recognise it; they do not see it or know it, and too often they do not feel it. That is one reason that I am taking matters into my own hands in my constituency in south Devon. Not only have I met representatives of South West Water and had conversations with them about their new WaterFit programme, which is due to go live in the coming weeks, with a new website specifically designed to give up-to-date, real-time, understandable and digestible information to members of the public about the quality of our water; I will also be getting representatives of South West Water to come to Brixham on 30 March and to Totnes on 27 April to discuss their plans to ensure that action is being taken, so that people can have some confidence and understanding about what needs to be done.

It is clear that a pollution incident reduction plan is working in respective constituencies across the south-west, but we must be able to show that there is an increasingly downwards trend in pollution. My hon. Friend the Member for East Devon was right to say that last year was a dry year, and therefore we must take the data with which we are presented with a pinch of salt, but let us use this opportunity to speed up the way in which our water companies deliver their projects.

I have three suggestions as to where we might go. The first is about where we are building. There is a shortage of houses across the south-west. There are a huge number of development projects across our countryside and rural areas attached to towns, but all too often we are building staggering amounts of houses but are not taking into account the infrastructure. When the infrastructure is not taken into account, hundreds of new homes flood our sewerage networks, meaning that they can no longer cope so pollute our waterways and beaches as a result. It must be a stand-alone policy that for any development plan to go forwards, the infrastructure must already be in place, rather than leaving it to chance.

Secondly, it is absolutely right that Ofwat should be able to issue sizeable fines, but all too often the fines take too long to implement, and there is a certain level of opaqueness around where they end up. It must be clear and certain that fines from water companies are put back into ensuring that waterways, beaches and coastlines are clean, and that the process happens in a speedy manner.

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[Richard Foord]

The hon. Member suggests that some solutions should be offered by other parties. I will give him one: scrapping Ofwat. It has been found to be a toothless regulator, which the Government have permitted to be toothless. The hon. Member should advise the Government to get a regulator with teeth.

[Anthony Mangnall]

There was no question there. If the hon. Gentleman could not be bothered to put that point in his speech, that is hardly my problem.

Let us use the body that we have in place, and ensure that that leads to meaningful action; that can happen. If the fines we want to see water companies pay for failure of duty can be issued, we can restore confidence in the network by seeing that money go back into the system. We need the regulator to be enforced with teeth for meaningful action. Scrapping it and then looking for a replacement, which is inevitably what will happen, will not lead to any better levels of responsibility from water companies.

In my constituency, I have seen £5.3 million invested in our waterways. It is clear that more money will be needed and invested. We need to ensure that monitoring is 100% all year round, and that we keep an eye on that. Some of us swim all year round, so we want to see that the monitoring is in place. I am acutely aware of campaigns across my area—from the Friends of the River Dart groups to those on our beaches such as Surfers Against Sewage—to ensure that bathing water status is protected.

This is an important issue on which the Government have taken meaningful action. We must be clear about the progress we have made to date. We cannot click our fingers and ensure that things happen immediately, because this takes time. Not only would it be impossible to click our fingers and say to a water company that it must do everything immediately; it will lead to serious implications for the existing network, with flow back to people’s houses.

We must be clear about that. The steps that we have set to 2030, 2035 and 2050 are the right steps. They are measurable, with report indicators to come back to Government to justify their actions. Through those mechanisms, we can hold the water companies to account to ensure they are delivering on time, at speed and at price —and that they are not pushing that back to consumers.

We all want to protect our coastlines, which is why the Environment Act 2021, the Agriculture Act 2020 and the Fisheries Act 2020 contain enforceable legislation to ensure that we look after our waterways, enhance biodiversity, and keep this a green and pleasant land to live upon.

[Anne Marie Morris (Newton Abbot) (Con)]

I thank my hon. Friend the Member for East Devon (Simon Jupp) for this timely debate. It is clear from the contributions across parties that we all feel strongly that this issue must be gripped and grasped.

The water industry is fairly heavily regulated. It has Ofwat, the economic regulator; the Environment Agency, the environmental regulator; and the Drinking Water Inspectorate, the drinking water regulator. The key is to make those regulators work effectively together, and to understand the underlying problems. As has been explained, finding a problem and imposing a penalty is not enough. We have to ensure that the problem itself is rectified.

South West Water did not perform well under Ofwat. The December 2022 report, which my hon. Friend the Member for East Devon referred to, set out that South West Water had fallen below its commitment level in five separate areas: customer satisfaction; the number and duration of water supply interruptions; water quality; the second highest number of pollution incidents in the country; and treatment work compliance, resulting in the £13.3 million fine.

Given that Ofwat set other targets, one asks why those have not been met and acknowledged. There is an allowance for investing in improvements, and South West Water had the second lowest investment. Given that it has some of the biggest problems, why is it the second lowest spender? It spent only 46% of its allowance—why? It is incumbent on South West Water to explain that to us. I certainly hope Ofwat will dig a little deeper into the reasons and look at what we might do differently to ensure the right level of investment. As has been said, the Environment Agency, the second regulator, looked at six metrics, and South West Water got only one star—the lowest rating—on environmental performance.

My hon. Friends have already set out what the Government have rightly done to shine a light on the problems and inadequacies, and to put in place a remedy, but we need more than just fines. We need to unpick how we will drive forward the change that is needed and understand better the cause of the problem. We regularly blame the low settlement figure on privatisation, given the geography of the south-west, but other than the continuing Government contribution to our water charges, for which I am extremely grateful, I am not aware of any work that has been done to look at the underspend. Is that argument justified, and how can that investment be put back? South West Water may well say that it cannot be done, but until we know what the figure is, we cannot assess its responsibility since privatisation and identify where more help needs to come from the Government. Ultimately, although our water is in private hands, it is a public good. It may be that the Minister can help me by providing some figures on that.

The second thing we clearly have to look at post privatisation is the role of the shareholder. Do we feel that, in this case, the shareholders have been complacent? What happened to corporate governance? What happened to the obligation to be concerned about businesses’ impact on their environment? What happened to their social responsibility? It seems very strange that there is a tick in the box in South West Water’s accounts, yet there are these incredible shortfalls.

[Richard Foord]

Will the hon. Lady give way?

[Anne Marie Morris]

I will not.

We then have to ask whether the three regulators were asleep on the job. Why is it only now that the Conservative Government have shone a light on the problem that they have suddenly woken up and begun to take steps? Further work needs to be done.

Are there some peculiarities about the geography of the south-west—its size, our farming communities, which inevitably lead to a degree of run-off, and the housing developments? As has already been explained, the challenge is that our water company has no ability to say, “No, the system we currently have cannot accommodate this new housing.” We know that there is pressure for housing and that we need that housing, so where should the responsibility lie for making the right investment so that the water and sewage system is fit for purpose? It seems that there needs to be a much greater investment obligation on the developer; it should be obligated to work with the water company to ensure that that investment can be made in the context of the existing infrastructure.

South West Water has clearly recognised that much more needs to be done. Like my hon. Friends the Members for Totnes (Anthony Mangnall) and for East Devon, I have had regular meetings with South West Water. We are at the point where South West Water is listening and, as my hon. Friend the Member for East Devon made clear, the level of investment has gone up significantly. The question is: is it enough? We ought to look closely at the numbers—the investment that has been put in, how that falls short of what could have been put in as agreed with the regulator, the rewards for shareholders and the bonuses for executives. Does it feel right? Does it pass the smell test? Right now, the jury is out.

[Richard Foord]

On that point about investment, will the hon. Lady give way?

[Anne Marie Morris]

I am afraid not. Remember that one of the key shortfalls was the lack of communication. South West Water’s communication has definitely improved. The WaterFit app, which my hon. Friend the Member for Totnes referred to, will be one of the first in the country, and it would be a good start. I understand that there is also now a programme for interaction with schools, and young people are asked for their views about the right way to improve water quality. All that is very good, but communication has to be converted into action. We need to look at where we go from here. South West Water is a private company, but it is for public good.

[Richard Foord]

Will the hon. Lady give way?

[Anne Marie Morris]

I am afraid not. When we looked at some of the shortfalls in the railways, the Government stepped in, because they recognised that the sector was not working. I give credit to the Conservative Government for going above and beyond anything that had been done before. Is there yet another step that needs to be taken to ensure that the public get the quality of water they need and deserve, given its significant impact? It is what we, as human beings, are mostly made of, and it is a key driver of our health and wellbeing. It matters fundamentally. This issue has been of great interest to the Minister, and she is to be credited for the work she has done. Does she think the Government could look at going further, alongside what they could do by working further with the three regulators, to improve water quality in the south-west?

[Ruth Jones (Newport West) (Lab)]

It is a pleasure to serve under your chairmanship once more, Sir George. I am grateful for the opportunity to speak in the debate. I congratulate the hon. Member for East Devon (Simon Jupp) on securing it and for raising such important issues in his opening remarks. I also congratulate the hon. Member for Tiverton and Honiton (Richard Foord) on raising important points, and I welcome him as a new friend to the Opposition Benches.

In a nutshell, we have a water crisis in this country. People up and down England are simply and rightly sick and tired of the impact that sewage discharges continue to have on our streams, rivers, seas and local economies. They are sick and tired of leaks, burst pipes and poor-quality water. It is clear to all of us that Ministers need to get a grip of this crisis—sooner rather than later.

Today, we have had the opportunity to look at and address the evidently poor performance of South West Water. Colleagues will know that Ofwat—the regulator—and the Environment Agency publish annual reports measuring water companies’ performance against their performance level commitments and environmental obligations. In their most recent reports covering performance in 2021, both regulators gave South West Water their lowest performance rating. As we have already heard, that is a matter of huge concern for the hon. Member for East Devon. It is also of concern to my right hon. Friend the Member for Exeter (Mr Bradshaw) and my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard). They who would have liked to have been here but, due to prior commitments, they are unable to attend.

South West Water was also criticised for a lack of capital investment, as has been mentioned. Across the water sector, poor planning, a lack of investment and neglect of our vital infrastructure has left us with a system that leaks more than a trillion tonnes of water every year and spills raw sewage into our natural environment hundreds of thousands of times a year. As a result of Ofwat’s assessment, South West Water will be required to pay a fine of £13.3 million in the form of lower bills for consumers. The repeated and unacceptable failures of water companies are devastating whole regions in England, our coastlines, and the livelihoods and health and wellbeing of our people.

[Richard Foord]

Let me show the scale at which this affects the region. Does the hon. Lady know that there are more than 350,000 hours of dumping in South West Water’s areas, including on to our prestigious blue-flag beaches, three of which are among the 10 most affected beaches in Devon?

[Ruth Jones]

I did know those figures, but I am grateful that the hon. Gentleman has put them on the record so that I do not have to.

Last week, we had an urgent question in the House from the right hon. Member for Romsey and Southampton North (Caroline Nokes). Again, we had Ministers making empty promises and the same old tired excuses. The failure of Ministers to act means that the water companies know that they can laugh all the way to the bank. Why? Simply because the Government are not stepping up to show the required leadership. All the while, local people are suffering, whether that is because they cannot enjoy their local beauty spots or take a walk down the river, or because of the effect on the coastal businesses that are reliant on seasonal tourism to provide jobs, opportunities and livelihoods.

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[Rebecca Pow]

I thank my hon. Friend for his intervention. That was coming later in my speech, but I will touch on it now because customers are rightly asking those questions. We are determined to improve the water environment, and that is why we announced at the end of November that we would channel future revenues from fines and penalties handed out to water companies that pollute rivers and the sea into projects that will improve the water environment. That seems to be extremely popular, and it is the right thing to do. We will announce further details later in the year. We are also consulting on raising the whole bar to a fine of £250 million and, for the EA, civil sanctions. As has been said, Ofwat already has the power to charge a water company 10% of its turnover, and the EA has unlimited fine powers through the criminal courts for taking action, so strong powers are already there; they just need to be used.

Contrary to what the shadow Minister and the hon. Member for Tiverton and Honiton say, this Government are taking crucial steps to improve the whole water landscape, particularly the transparency of storm overflow operations, and to require water companies to make major investments in this area. Last week the Secretary of State asked water companies to get back to her with clear plans for every storm sewage overflow and the upgrades, starting with the ones in bathing water areas and those near our highly protected nature sites, because it is of critical importance that we do not pollute those waters.

I have mentioned that monitors are going in, which will mean we have 100% cover by the end of the year. As my hon. Friend the Member for East Devon said, we want those monitors to go in, and water companies will have to show clear plans of where they are going and when they are in. The monitors are for what we call event duration. The first ones will show how long the overflows are used, so we will have that data, and there is a requirement to publish near-real-time information about how often they operate, so we will have all that clear information. Water companies will also be required to put in monitors to monitor the water quality both above and below storm sewage overflows. That will determine what is in the water, which is information we need. We will consult on that shortly. You will see, Sir George, the picture I am building of a comprehensive list of work.

I want to be absolutely clear, particularly to the hon. Member for Tiverton and Honiton, that, as several colleagues have said, nobody in this Government voted to legalise sewage discharges into water courses. In fact, the Government put forward a raft of new laws to reduce the use of storm sewage overflows through our landmark Environment Act 2021. I hope we will get over the misinformation that has been spread, which has genuinely not helped anyone at all.

Independent fact-checkers have shown that a lot of the Liberal Democrat information that has been put out there has been incorrect and has not been credible. In fact, the plans that the Liberal Democrats suggest would not have stopped or banned sewage discharges; would cost up to £20,000 per household, which is absolutely unrealistic; and would take 1,000 years to raise the billions of pounds that they say is needed. I hope I have been clear that that is not credible.

The Government have put in place sensible, costed plans to tackle the issue, including in respect of storm sewage overflows, and we have introduced powers that allow us to direct underperforming water companies. We have in place a really comprehensive package. The improvement of water quality remains an absolute Government priority, and that is backed up by the comprehensive package we have announced.

[Richard Foord]

If the Government are so very keen on holding water companies’ feet to the fire, why did it require a Liberal Democrat amendment to the UK Infrastructure Bank Bill for the development of costed, time-limited plans to be a condition for the lending of Government funding to water companies for investment in infrastructure?

[Rebecca Pow]

That is a bit of a red herring, because all the things I have just outlined involve costed plans and the monitoring of plans. Water companies will now have to produce drainage and sewage management plans. Previously, they had to produce only drainage plans, but now they have to produce sewage plans, so we will know what comprehensive infrastructure is required.

My hon. Friend the Member for Totnes (Anthony Mangnall) touched on the important issue of housing. We must ensure that the development that we all need and the housing that people want are linked up correctly to our water system. A lot of work has been going on in that respect, and I am sure that my hon. Friend welcomes the fact that what we call sustainable urban drainage systems, or SUDS, will now be mandatory. The right to connect surface water to public sewers will be conditional on companies putting in sustainable urban drainage systems. That will help to separate the storm water so that it does not go down our sewage pipes. That has been talked about for a long time—it was one of my pet subjects when I was a Back Bencher—so I am delighted that the Government are making it a reality.

The hon. Member for Tiverton and Honiton read out lots of gruelling letters from his constituents, but it is quite interesting that South West Water has just introduced a scheme called WaterShare+. One in 14 households in the south-west have become shareholders in South West Water, so they will be able to play an active part in holding their water company to account and making sure it is a socially responsible business. I believe South West Water is taking note of what comes its way from its customers. It needs to put it right, and I genuinely hope it will.

All water companies must clean up their act, and the Government have demonstrated that we have the most comprehensive plan in the history of the water industry to make that happen. We will work with the water companies and Ofwat to make sure that happens, but will not hesitate to take action using all the powers now available if we do not see the improvement that we need.