Garfield calls for broader debate on pollution blame game

Water companies are not solely to blame for polluted waterways and shouldn’t have to shoulder all the blame, Severn Trent chief executive Liv Garfield has suggested.

While backing Water UK’s apology on behalf of the sector, issued last week, Garfield said that she “would love to see [the debate over polluted waterways] broadened out”.

The Severn Trent boss previously told a House of Lords inquiry that improvements to river health made by water companies were “eaten up by agriculture” leading to a plateauing of water quality.

However, Garfield acknowledged the water sector’s need for a collective push to improve its reputation amid a growing number of negative media stories and political scrutiny.

Speaking on the day of the company’s full-year results, Garfield praised the direction the recently appointed chair and interim-chief executive of Water UK were steering the industry body towards.

“Last week was really important,” Garfield said of the apology issued by Water UK on behalf of water and sewerage companies. “It was clear the sector did need to make an apology and to accept that we could have gone faster and quicker on this topic. That’s true for the whole sector.”

She said there was “an interesting debate” to be had over the fairness of the water sector being apportioned the lion’s share of blame for polluted waterways despite other industries having significant impacts.

The apology followed widespread media and political scrutiny with public anger relating to the state of waterways.

To turn that around, better performing companies need to keep setting higher standards around combined sewer overflows, while those struggling need to improve, she added.

Severn Trent has already hit the target ahead of 2025 to cut discharges by 25%, with its spill average from each CSO reduced from 25 to 18 annually.

The company’s pre-tax profit for 2022/23 was £509 million, up 1% year-on-year from £506 million.

The total dividend paid out will rise to £261 million, a rise of £6 million year-on-year in line with inflation. Corporate costs, which includes directors’ bonuses rose by £0.5 million to £8.7 million for the year, while total remuneration of key management personnel fell from £13 million in 2022 to £10.9 million this year.

Severn Trent previously declined to comment on whether Garfield would accept a bonus this year until after the annual report is published in July. This followed chief executives of Thames, Yorkshire, Welsh and Pennon forgoing bonuses amid consumer anger at performance.

Garfield underlined that although companies will self-fund necessary improvements on CSOs, customer bills will rise at the next price review. For PR24. Garfield argued for a step-up in investment, with support from the regulators to focus on water resources, net zero and river health improvements. As part of its preparedness for the next asset management period (AMP8), Severn Trent is planning for capital investment of up to £1 billion in the next year.

“Guidance set by all regulators is clear they want to see more investment,” she said. “There is an expectation bills will rise across the back of that. The key thing is to keep affordability at the heart of the conversation.”