£35m fine for Severn Trent

Severn Trent Water is facing a £35.8m fine for deliberately providing false information to a regulator and offering a poor service to its customers.

Ofwat, the regulator for the water industry, is fining the utility company £34.7m, or 2.9 per cent of total turnover, for giving false customer-service information about its performance. It is likely that Severn Trent will also receive a fine from the criminal courts. The company, which says it will now be cutting bills by £2.40 per household per year for two years, will be penalised a further £1.1m for bad customer service.

"The size of the proposed fine reflects how seriously Ofwat takes the deliberate misreporting of information," said Regina Finn, the regulator's chief executive. "This sends a clear message: Ofwat will protect consumers, and companies must comply with their legal obligations or pay the price."

In response, Tony Wray, chief executive of Severn Trent, said: "We fully accept that the company is responsible for its failures. There is no doubt that the previous regime lacked sufficient controls and procedures. Those who were responsible for the customer relations mistakes are no longer with Severn Trent."