South West Water has announced plans to invest £81million into environmental improvements and create 500 jobs to help the region’s economy recover from the Covid-19 pandemic – without putting bills up.
The Exeter-headquartered company’s draft Green Recovery Initiative has been assessed by South West Water’s (SWW) regulator and the company is looking to press ahead with its plans.
Following a detailed assessment, Ofwat has published its decisions, outlining £81million of additional environmental investment for South West Water’s Green Recovery Initiative during the next four years with no impact to customer bills.
South West Water’s Green Recovery Initiative includes investment across the whole region and supports the creation of about 500 jobs, benefits the wider supply chain and provides opportunities for South West Water’s existing workforce to gain new skills.
The company said its proposals incorporate an important and manageable set of schemes in addition to existing business plan commitments.
And it is supported by customers, with a customer acceptance rating of 81%, along with the support of South West Water’s independent WaterShare+ Advisory Panel.
Ofwat’s draft decisions will allow the company, owned by parent firm Pennon, to take extra action on the most pressing environmental issues.
Its proposals include a range of initiatives which include taking action to eliminate harm from storm overflows and trialling improvements to river quality to match standards of bathing waters.
Alongside this, many of its initiatives also support the achievement of ambitious net zero carbon commitment including extensive peatland restoration in the South West, the development of low-carbon water treatment works, and helping customers create smarter, healthier homes.
Susan Davy, Pennon’s chief executivem said: “Our Green Recovery Initiative is focused on opportunities to make an even bigger environmental and societal contribution to the South West for the longer term than we already do today.
“We are confident South West Water can step up to the challenge, deliver for our customers and communities, and play our part in the Green Recovery.”
Following the UK Government’s commitment to “build back better” and “build back greener”, South West Water was asked to consider ways in which it could support the green economic recovery.
The Green Recovery Initiative, developed with customers and stakeholders, proposed a set of schemes benefiting the region – delivering benefits for customers, society and the environment.
The South West’s economy has been one of the hardest hit by Covid-19, and SWW, as one of the largest companies in the region, said its Green Recovery Initiative is focused on opportunities to make an even bigger and more societal contribution, with projects focused on improving public health, protecting the environment and addressing climate change.
The Green Recovery Initiative is in addition to existing efforts by the company to support the region, having already accelerated delivery of about £42million of investment, creating 500 new apprenticeships, and being one of the first companies to take part in the Kickstart scheme, providing work placements to young people at risk of long-term unemployment.
In November 2020, Pennon revealed a £15million fall in half-year profit but bosses stressed the business remained “resilient” in the face of the coronavirus pandemic.
Pennon’s results for the six months to the end of September 2020, a period characterised by the Covid-19 crisis and its economic aftershocks, showed an underlying pre-tax profit of £86.7million.
But this was down 14.5% from the £101.4million profit for the same period in pre-Covid 2019. Revenue was also down slightly, a 1.9% drop from £325.8million to £319.7million.
In 2020, the FTSE-100 company made a £1.7billion profit from the sale of its waste management operation Viridor - having taken £3.7billion in net cash proceeds, from the £4.2billion disposal - and is paying off debt, with £750million already paid back and £36million injected into the company’s main pension scheme.
This leaves Pennon with £2.7billion for investment, the accounts revealed. Already there has been speculation that the company will make a bid to buy Southern Water.
Pennon said it has rapidly adapted to the operational and financial challenges presented by Covid-19 and is well placed to weather the crisis.
