But more heads need to roll! – owl

Sequence of events this week

This week 12 local MPs have signed a couple of highly critical letters to Susan Davy (two signed both).

On Tuesday 8 July, Fred Thomas, Labour MP for Plymouth Moor View wrote to South West Water boss Susan Davy to demand that she forego her bonus of nearly £200,000 and instead redistribute the sum to the customers South West Water has failed. The letter noted that compensation to customers was still outstanding and that four criminal investigations were under way. He gathered cross party support from six local MPs including a couple of LibDems, Steve Race MP for Exeter, and David Reed MP for Exmouth and Exeter East.

On Thursday 10 July, Susan Davy, in defiant mood, posted her “considered reply” on the SWW web site:

Dear Fred,

Thank you for your letter. I have reflected on this overnight and wanted to respond as soon as possible.

Each year I get to talk to thousands of customers, whether at one of our community roadshows or through our Watershare + panel facilitated events. I want to assure you and your MP colleagues that I’m listening. From questions about storm overflows to hosepipe bans, bonuses, dividends, bills increases and everything in between, they are always challenging conversations and rightly so. It’s as a direct result of this feedback that we are making the biggest ever investment across the South West, focused on the things that customers have told us matter most to them and I’m confident that customers will see real change.

That said, with critical infrastructure, there are unfortunately times when things can and do go wrong. I will continue to be grateful to customers for the patience, kindness and compassion they show my teams who work 24×7 around the clock on the rare occasions this happens. I’m very clear it’s how you respond, learn the lessons and how you support customers that counts and everyone who works at SWW believes that too.

We are also very conscious that this step up in investment will drive up bills. Having made this tough decision, for the first time in over a decade of driving down bill levels, two thirds of this investment will not be funded by customers, instead funded by our investors and debt providers. We have also announced a £200m support package for the most vulnerable, and we would urge any customer struggling to pay to get in touch – we can and will help.

Finally, I am not immune to the strength of feeling around executive pay, particularly around cash bonuses. It’s always an extremely emotive topic and I understand why that is. I have a very responsible job operating in the public interest for circa 4m customers. Given this, my remuneration is set, assessed and awarded independently. In previous years I have forgone bonuses when right to do so. For 2025, and already published in Pennon’s Annual Report, no annual bonus has been awarded, with a long-term incentive plan reinvested back into the business as shares, aligned to the long-term nature of the changes we are making for the future.

Yours sincerely,

Susan Davy
Chief Executive Officer, Pennon Group

Same Day Ofwat publishes enforcement action having found that South West Water has failed to build and operate its wastewater treatment works and sewer networks to ensure they performed sufficiently. The company did not have in place adequate management systems to ensure it was meeting its legal obligations in this regard, including adequate oversight from its senior management team and Board.

Same Day the eight Local LibDem MPs sign and deliver the following coup de grâce:

10 July

Dear Susan   

Re: OFWAT Wastewater Investigation 

Today we received OFWAT’s findings following its investigation into South West Water’s (SWW) management of its wastewater systems and procedures.

Having taken account of the context of this investigation, after years of public dismay at the regularity and extent of sewage discharges into our rivers and coastal waters, OFWAT’s report is clear regarding SWW’s failure to fully respect its legal obligations in this regard.

We regret that what little remaining confidence we had in you as Chief Executive and your Board, has finally been completely extinguished with this report. We do not believe either you or your Board are equipped or fit to achieve the kind of “transformative change” sought by the public, as referred to by OFWAT in its letter.

We note that OFWAT found: “South West Water has failed to build and operate its wastewater treatment works and sewer networks to ensure they perform sufficiently. The company did not have in place adequate management systems to ensure it was meeting its legal obligations in this regard. including adequate oversight from its senior management team and Board. The failures have led to unjustified spills, where wastewater has not gone through all the treatment processes it is supposed to before being released into the environment.”

And that SWW failed to: “Ensure that its Executive and Board received and/or sought sufficient information and assurance on the operational performance of the company’s wastewater assets and their compliance with relevant legal obligations. This lack of adequate oversight resulted in the company’s management failing to be aware of and/or failing to address compliance failures and risks.

SWW doesn’t just run a private company. It also operates a regulated public service which has the privilege of being a largely monopoly supplier on which our communities depend. As such, the public and we, the community’s elected representatives, should reasonably expect that you and your Board reflect this in the manner these duties and legal obligations are discharged.

In the light of OFWAT’s report and after reviewing the situation for the past year since the general election, when we had hoped SWW put its house in order and address the systems failures and to respect its legal requirements, we do not believe you or your Board are best placed to drive the “transformative change” needed.

We will of course make representations during the consultation, and convey a copy of this letter to OFWAT and to the DEFRA Secretary of State, Rt Hon. Steve Reid MP.

Your sincerely

Andrew George MP (West Cornwall and the Isles of Scilly)

Rachel Gilmour MP (Tiverton and Minehead)

Caroline Voaden MP (South Devon)

Steve Darling MP (Torbay)

Richard Foord MP (Honiton and Sidmouth)

Ian Roome MP (North Devon)

Martin Wrigley MP (Newton Abbott)

Ben Maguire MP (North Cornwall)

On Friday 11 July. Susan Davy “steps down” claiming “The time was right to pass leadership to a new generation” after nearly three decades in the water sector.

Owl’s footnote: should anyone be concerned about the future of 56 year old Ms Davy, Companies House lists her 26 appointments which provide her with ample opportunities to find alternative avenues for her talents. 

With people like her in top jobs, how can Britain fail?