South West Water's £13bn investment as sewage spills continue to blight Cornwall
A wave of sewage spills have blighted Cornwall in recent weeks and many locals are furious about the state of the sea. Alerts have been issued regularly by Surfers Against Sewage urging people to stay out of the water for their own safety, as combined sewage overflow pipes flow into the sea.
Some ask why water companies, like South West Water, are even allowed to dump raw sewage in the our rivers, lakes and oceans in the first place? One could be inclined to ask the question, why can't they fix it all? After all, they have had 35 years as a private company to do so.
Pennon Group, which is mainly made up of South West Water, Bristol Water and Bournemouth Water claims to have invested £13bn in infrastructure work in the last 35 years (including £7 billion for SWW alone). In that time SWW have also given their shareholders £4.5 billion in dividends and racked up £3.1 billion in debts with 14 per cent of customers' bills now spent servicing such debts.
On the face of it, sewage is still being dumped in the sea, so where did all that so-called investment go? Have they spent cash on a brand new pumping station or on plugging any potential leaks there might be at some of the reservoirs they own?
A spokesperson said: "We care about our 860 miles of coastline, our region's 100 per cent bathing water quality, which we have successfully maintained for three consecutive years, and protecting the environment now and in the future.
"We know our customers want to see immediate action to reduce the use of storm overflows. This is an absolute priority and as part of our investment of £2.8 billion from 2025 - 2030 we will be the first water company to meet the Government’s target of less than 10 spills a year per overflow by 2040 - 10 years ahead of our 2050 deadline."
Over the years, SWW did carry out some investment, like the £60m Mayflower water treatment works built in 2020, at Roborough in Plymouth, or the £850,000 they have spent to replace the sewers at Penryn, or the £270,000 spent to replace a large section of cast iron pipework in Fowey with more modern plastic pipes.
In Duloe near Liskeard, last year's most frequently spilling storm overflow was repaired and a huge rig was brought in to fix the sewage outlet at Polperro. In 2021, at Combe Martin in North Devon, 40,000 trees were planted to help improve bathing water quality. The aim being that tree planting, hedging and fencing helps protect the River Umber from bacteriological contamination, which in turn can reduce polluted water ending up in the sea at Coombe Martin.
There was also project ReFill – a sucess story campaign that encourages the use of refillable bottles as a way to cut down on single use plastic. First launched in Bude in 2014 it is now in operation at more than 1,200 locations such as cafés, hotels, restaurants and shops, allowing the public to top-up their water bottles for free and go plastic-free.
But despite this, after 35 years and £13bn of investment, Cornwall is still blighted by sewage discharges.
In her annual report from 2023, CEO Susan Davy blamed the bad weather for more sewage going in the sea, saying there were at least 12 yellow weather warnings since 2022 and into 2023 which triggered more use of storm overflows "than any of us would like to see, even though they will have protected thousands of our homes and businesses from internal sewer flooding".
She wrote: "We also must remember the huge strides we’ve taken in recent decades. In 1990, around 90 per cent of the sewage in Devon and Cornwall was discharged untreated to the environment, most to coastal waters. Thanks to Clean Sweep, the largest marine improvement programme in Europe, and £13 billion of investment, we created a legacy of excellence in our region’s designated bathing waters. Just one example of Clean Sweep’s benefits was Exmouth - one of the most popular beaches in our region, where we have seen significant (around 96 per cent) falls in harmful bacteria in the Agency’s water samples since the 1990s.
"The result is that we now have some of the best bathing water quality in the country. Whilst ‘excellent’ between May and September, our monitoring tells us we need to ensure ‘excellent’ water quality all year round. Release from overflows can result in diluted raw sewage going into our rivers and seas, and it is not acceptable.
"It is wrong, and it must stop. We have a plan to deliver transformative change to dramatically reduce the use of storm overflows and ahead of Government targets. Customers and communities are rightly concerned and disappointed. We are too – but we will fix this as quickly as we can, with the help of our investors."
Sign up to receive daily updates and breaking news alerts from CornwallLive straight to your inbox
According to Top of the Poops, an organisation supported by St Agnes-based environmental campaign organisation Surfers Against Sewage, which analyses sewage pollution by the water industry in England and Wales (water management is public in Scotland), Portreath beach was polluted by sewage 120 times in 2023, with incidents lasting a total of 2,180 hours. This equates to just over three months, or sewage pollution incidents happening 2.3 times a week.
Last November, the Bluetits of Portreath held a protest on the beach to highlight the fact that their beach, that is such an asset to the village and so many tourism-reliant businesses, had sewage alerts for 26 consecutive days. At the time SAS said multiple sewage alerts had also been flagged at Porthtowan, St Agnes, Godrevy and Gwithian.
Sewage overflows are meant to act as an emergency relief valve for the sewerage system to stop sewage backing up into people's homes and business. Legislation states they should only be used in ‘exceptional circumstances’.
The SWW spokeswoman added: "South West Water were one of the first water companies to have all its storm overflows monitored meaning it knows exactly what is happening, when and where, allowing the company to target investment and make changes where it matters most."
In 2021 alone, along with the other water companies in England and Wales, they discharged sewage into rivers and the sea over 370,000 times. That’s 2.7 million hours of sewage ending up on beaches and river banks.
Earlier this year SWW was rated as having the worst sewage pollution record ever. It was also rated as "the worst performing company for pollution incidents in the Environmental Performance Assessment's 13-year history". The report by the Environment Agency (EA), similar to an Ofsted report for schools or a Care Quality Commission report for health and social care settings, gave the company two stars.
The poor rating for SWW was mostly due to the incidents of sewage being dumped in our rivers and sea whether legally or illegally. The EA's report showed that SWW has had one of the worst records in the country for pollution incidents every year for the past 13 years.
In April 2023, the company appeared before a court facing a series of charges relating to illegal water discharge activities and breaches of environmental permits at locations across Cornwall and Plymouth between 2015 and 2021. They were fined £2.1m for the environmental breaches.
Below is the list of the top 10 investors who control the company:
Lazard Asset Management LLC - 25m shares worth 8.7 per cent of the company or £197m. Based in the USA.
KBI Global Investors Ltd - 15.3m shares worth 5.3 per cent (£121m). Based in Ireland.
Nuance Investments LLC - 15.2m shares worth 5.3 per cent of the company (£121m). Based in the USA.
Impax Asset Management Ltd - 15m shares worth 5.2 per cent (£119m). Based in the UK.
ClearBridge Investments Ltd - 12.4m shares worth 4.4 per cent (£99m). Based in Australia.
Pictet Asset Management Ltd - 11.6m shares worth 4.1 per cent. (£92m). Based in the UK.
BlackRock Investment Management (UK) Ltd - 10.5m shares worth 3.7 per cent. (£83m). Based in the UK
Legal & General Investment Management Ltd - 10.2m shares worth 3.6 per cent (£81m). Based in the UK.
Amundi Asset Management SA - 9.8m shares worth 3.4 per cent (£78m). Based in France.
Invesco Asset Management Ltd - 8.7m shares worth three per cent (£69m). Based in the UK.
Looking back at the last 10 years of financial reports filed with Companies House, here's how SWW performed and how much money they have given out in dividends:
2024
For the year 2024, SWW announced revenues of £731m including earnings before tax of £335m and after-tax profits of £14.2m. It did not pay out any dividends to its share holders.
2023
However in 2023, SWW's annual report showed £587.6m in revenues, with £256.7m in earnings before tax and after-tax profits of £22.4m.
It also paid up £12.3m in dividends to its shareholders. Campaign group We Own It, which is asking for utility services to go back under public ownership, said it equates to paying shareholders £23 for each hour SWW polluted our rivers and seas that year, for the 530,737 hours the Environment Agency said CSOs were active.
The group said that since being privatised in 1989, SWW has paid out £4.5bn in dividends and its debt now stands at £3.1bn when it started its private life utterly debt free. The group also pointed out that 14 per cent of our water bills are used to service SWW's debt.
2022
In 2022, it announced revenues of £584.6m, pre-tax earnings of £331.3m and profits after tax of £124.8m. In 2022 it released £88m in dividends.
2021
This year it announced revenues of £564.3m, pre-tax earnings of £340.6m and profits after tax of £134.2m. In 2021 it paid £43.5m in dividends and deferred another £58.1m to give out another year.
Read next: Inside the Cornish 'sewage capital' where locals are furious
Read next: South West Water sewage pollution record is worst in watchdog's history
2020
In 2020, SWW announced revenues of £571.6m, pre-tax earnings of £363.9m and profits after tax of £139.4m. It also paid out £249.7m in dividends including some that had been held back from the years 2017, 2018 and 2019.
2019
In 2019, SWW reported revenues of £582.4m, pre-tax earnings of £367m and profits after tax of £151m. It also paid out £123.1m in dividends which included performance dividends from 2018 and the previous year too.
2018
In 2018, SWW reported revenues of £572.8m, pre-tax earnings of £360.5m and profits after tax of £148.4m. It also paid out £120.3m in dividends which included performance dividends held from 2015/2016 and 2017.
2017
In 2017, SWW reported revenues of £562.5m, pre-tax earnings of £348.1m and profits after tax of £234.3m. It also paid out £213.1m in dividends which included performance dividends from 2015/2016 and 2017.
2016
In 2016, SWW reported revenues of £506.4m, pre-tax earnings of £215m and profits after tax of £137.4m. It also paid out £74.9.m in dividends.
2015
In 2015, SWW reported revenues of £523.6m, pre-tax earnings of £225.5m and profits after tax of £132.5m. It also paid out £255.8m in dividends which included performance dividends from 2014 and 2015.
2014
In 2014, SWW reported revenues of £521.5m, pre-tax earnings of £226.7m and profits after tax of £163.5m. It also paid out £112m in dividends which included performance dividends from 2013 and 2014.
Back to our present day. In March 2024, when the firm announced its latest results, it also announced that chief executive Susan Davy's pay package included a salary of £562,000 and a £300,000 bonus. The announcement came weeks after an outbreak of cryptosporidiosis which saw 17,000 households in the Brixham area forced to boil their drinking water.
Ms Davy did forego her bonus saying it was the right thing to do.
SWW's 2024 financial report lauded how the company had "broken the drought cycle for Devon and Cornwall and achieved 100 per cent peak reservoir capacity. It lauded its "sector-leading internal sewer flooding performance – focusing on what matters most for our customers" and also praised its 100 per cent bathing water quality for a third consecutive year and a peak investment of £583m in water business to "protect our customers, the network and the environment".
The firm also said it now had a £145m commitment to renewable energy providing 40 per cent of its group energy requirements and below inflation bill increases.
In her annual financial report, Ms Davy, said: "The fundamentals are strong for a more sustainable future, reflected in record levels of investment, record support for customers, and as we create record numbers of jobs directly and in the supply chain, supporting the economic health of the regions we support. With a strong balance sheet and good liquidity, we retain the agility and ability to respond when it matters most and for the longer term, and in delivering on our strategy focused on UK Water."
She added: "We remain resolutely focused on our four customer priorities across the Greater South West. We are investing to protect water quality and enhance resilience; tackling storm overflows at our beaches and eradicating pollutions across Devon and Cornwall; and driving environmental gains, wherever we serve. At the same time, we have successfully managed customer bills to be lower than they were 10 years ago, as we pledge to eradicate water poverty."
Yet, sewage still flows happily into our rivers and our seas.
⚠️ Want the latest Cornwall breaking news and top stories first? Click here to join CornwallLive on WhatsApp and we'll send breaking news and top stories directly to your phone. We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don’t like our community, you can check out any time you like. If you’re curious, you can read our Privacy Notice ⚠️