Shaun Davies MP, alongside other West Midlands MPs, has written to Severn Trent Water (STW) to criticise the company for prioritising dividends and bonuses over crucial investments in infrastructure that would benefit both customers and the environment. This letter follows the alarming issues highlighted in this week’s Panorama program.

In July, Secretary of State Steve Reed made it clear that under this government, water companies must be held accountable for their performance in serving customers and protecting the environment.

Shaun Davies MP said: “Our water system is in urgent need of reform, and the government has announced the largest independent review of the water industry since its privatisation. This review will tackle sewage dumping and pollution, while also focusing on improving infrastructure, resilience, and driving economic growth. It is crucial that we regulate the water industry effectively to ensure it provides value for billpayers and safeguards our natural environment.”

The letter to Severn Trent Water CEO Liv Garfield which is attached raised the following key points:

1. Use of accounting practices: STW is accused of using financial tactics to avoid mandated investments while continuing to reward shareholders and executives, which contradicts government and regulatory expectations.
2. Infrastructure concerns: Claims of record investments by STW into infrastructure to reduce storm overflows and leaks, however this is not reflected in what we see across our constituencies.
3. Bill increases: STW’s proposal to raise consumer water bills by 46% over the next five years—above the national average—is criticised, especially as these hikes coincide with continued executive bonuses.
4. Environmental impact: Despite promises in their business plan to reduce harm to rivers, STW remains under investigation by OFWAT for wastewater treatment practices that may damage waterways.

The joint letter demands that Severn Trent Water accelerate overdue infrastructure projects, particularly for small rivers. It also calls on the company to reassess its proposed bill increases before OFWAT makes a decision in December 2024 and to redirect financial focus from bonuses to upgrading infrastructure.

The government and OFWAT are working to ensure that water companies prioritise essential improvements over profits. The letter urges STW to align with these goals to address the long-standing issues facing the water industry.