Severn Trent £35m fine confirmed

Water regulator Ofwat has confirmed it is fining Severn Trent Water a total of £35.8million for deliberately providing false information and poor customer service.

Ofwat proposed the fine - the biggest ever levied by the regulator - in April after ruling that customers had paid higher bills than necessary because of the failings.

Regulators have spent three months consulting on the fine, and said that it was being upheld after hearing representations from the Consumer Council for Water and Severn Trent.

Ofwat has stipulated the cost of the fine must be borne by shareholders and not passed on to customers.

The announcement comes a day after Severn Trent, which has 3.7 million household and business customers, was fined another £2m for lying about water leaks. Regarding the £35.8m fine, Ofwat said the firm deliberately provided false customer service data in 2005 and earlier years, such as how it performed on making and keeping appointments and the number of customers who received no replies to complaints.

Ofwat chief executive Regina Finn said: "Severn Trent's behaviour was unacceptable. This sends a clear message to the company and to the rest of the water sector. Any further attempts to deliberately mislead Ofwat could lead to even bigger fines in the future."

The firm said it would study the Ofwat decision and respond in due course. It has 42 days to launch a High Court appeal and must pay by August 22 if it chooses not to.

But he former boss of Severn Trent criticised the Serious Fraud Office (SFO) after yesterday's £2m fine, saying he and other senior managers had been blamed without being given the chance to clear their names.

Brian Duckworth, who was managing director at the time of false leak reports, said he "resolutely denied" any wrongdoing.

Mr Duckworth said no-one had lost out as a result of the Severn Trent leakage reporting.

He said: "It is therefore outrageous that the SFO has sought to implicate me in court, without affording me the opportunity to challenge its ill-judged assertions.

"The SFO has taken the view that it would be complex, costly and lengthy - and therefore against the public interest - to prosecute individuals from the company. Conveniently, this ignores the likelihood of the SFO failing to prove at trial that I acted in any way dishonestly.

"I sought to provide the SFO with my full assistance. I was neither arrested nor charged with any offence. I was asked to meet the investigators on just one occasion, during which no allegations of dishonesty or recklessness were put to me. Neither were criminal charges of 'intentionally misleading the regulator' ever subsequently put to me.

"Yet the new management of Severn Trent took a decision this year to plead guilty to two criminal charges in the full knowledge that I, as the then managing director, resolutely denied any suggestion of personal wrongdoing whatsoever."