Green light for Severn Trent’s £12bn investment programme

Credit: Severn Trent

Ofwat has given Severn Trent the go-ahead for its multibillion pound investment programme, set to create 7,000 jobs across the region.

The water company says its £12.9bn investment plan will keep customer bills the second lowest in England and provide £575m in extra financial support for 700,000 customers, meaning twice as many customers will have up to 70% off the bill.

Water companies were told by Ofwat today they will not be allowed to hike prices as requested in their business plans for the next five years.

Severn Trent had requested a bill rise to £144, but Ofwat has cut it down to £93.

It’s proposed a spending package of £88bn by water companies, which is £16bn lower than in the companies’ business plans. The plan by Severn Trent for the period 2025 to 2030, has been recognised by Ofwat as ‘Outstanding’.

David Black, Chief Executive, Ofwat warned all water firms: “Let me be very clear to water companies. We will be closely scrutinising the delivery of their plans and will hold them to account to deliver real improvements to the environment and for customers and on their investment programmes”.

As part of Severn Trent’s investment programme, £5bn is being directed towards securing new water resources that will provide an extra 100 million litres a day, £2bn will be used to improve river quality and storm overflows, and £450m is being invested at 900 Midlands’ locations to reduce spills by 20% a year.

Thousands of kilometres of new water mains will be laid across the region, in a drive to reduce leakage by 16% per year by 2029 – a target set by Ofwat.

As well as fueling 7,000 jobs, Severn Trent has made a ten-year commitment to help 100,000 people get into work across the region it operates in and will also install more than one million smart metres.

It’s using funds to meet sustainability targets, such as eliminating 240,000 tonnes of CO2e and becoming operational Net Zero by 2030. With partners Melbourne Water and Aarhus Vand, it will build on the world’s first net zero hub for operational carbon emissions in Stoke, to share global best practices between the trio.

Chief Executive Liv Garfield said: “Our customers told us what mattered most, and we listened. This multibillion-pound investment will bring huge benefits to our region now and for generations to come with a secure water supply of the best quality, reducing impact on rivers down to nearly zero, whilst importantly keeping bills affordable and helping anyone who needs extra support.

“Our customers will continue to have the second lowest bill in the country, backed by one of the largest financial support packages available – if anybody needs help it’s there. Another boost to the local economy is significant job creation, but we won’t stop there – we’ll help thousands more across the region back to work.”

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