17 May 2024

Severn Trent outlines cash plan to reduce sewage spills as CEO defends £3.2m pay

17 May 2024

Severn Trent has outlined plans to spend a major cash injection on reducing sewage spills as chief executive Liv Garfield defended her seven-figure pay package.

In an announcement on Friday, the water firm said it will spend £450 million by late 2024 to early 2025 after a £1 billion equity raise from investors in October.

The money is going to a range of storm overflow solutions across 900 locations in the Midlands, it said.

It comes as the industry faces fresh scrutiny over the quality of Britain’s water after revelations of a massive Lake Windermere sewage spill and that the parasite cryptosporidium has contaminated water systems in Devon.

Ms Garfield was forced to defend her seven-figure pay package on Friday as she spoke about Severn Trent’s capital investment programme on BBC Radio 4’s Today programme.

We've had not a great year in the last 12 months - accepted. But if you've looked at that four-year period over time - dramatic, dramatic progress

The chief executive admitted she had been paid £13 million in the last four years, saying: “Yes, it probably is true because it is performance-related.

“During that period of time we’ve been the best-rated company across the piece whether it’s by the Environment Agency – we’ve had the best environmental record – whether it’s Ofwat in terms of our service performance, whether it’s investors contributing cash in. So, we’ve had the second lowest bill.”

Ms Garfield was then challenged about her recent £3.2 million pay package due to the firm’s performance on sewage spills in the last 12 months, which saw an increase of more than a third to 60,000.

She argued the company has “improved river health” and “made major progress” in reducing spills over the last four years.

“We’ve had not a great year in the last 12 months – accepted. But if you’ve looked at that four-year period over time – dramatic, dramatic progress.”

Speaking of plans to spend some of the £1 billion cash injection, she said: “We’re talking about hundreds of people across ourselves and our supply chain literally building capital solutions between now and ideally Christmas … funded, as I said, by that investor contribution.”

The money is being spent on initiatives like installing 700 storage solutions at treatment works to capture more flows during high rainfall.

Around 300 engineers and data scientists will be working in a “zero spills hub” dedicated to storm overflow improvements, the firm said.

Severn Trent is carrying out a large-scale community trial, supplying 8,000 free water butts across 10 communities to reduce surface water going into drains and introducing “nature-based” solutions like the creation of more than 70 reed beds to treat sewage at the storm route for overflows.

The firm said that once the region-wide capital investment programme is complete, 20% of spills from storm overflows will be eradicated.

Last year, the water supplier revealed an increase in its profit and turnover but admitted the sector should have acted faster to tackle sewage spills.

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