Water firm agrees to pay multi-million pound penalty for wastewater failures

South West Water has agreed to pay a £24m penalty for wastewater spillages, the water regulator said.

The company, serving 1.8 million customers in the South West part of England, failed to meet its legal obligations in managing the wastewater treatment works and network, Ofwat said. South West Water did not have adequate management systems to ensure those legal obligations were met, including adequate oversight from its senior management team and board of directors, the regulator added.

Money blog: Top chef reveals thing he hates about customers As a result of the failures, the company spilt wastewater when it should not have. Some customers of the company were subject to a boil water notice in May last year, which remained in place for eight weeks, with roughly 17,000 households told to boil their water before drinking.

The utility was said to be the worst offender for sewage discharge into shellfish waters, responsible for 13,000 sewage discharges, totalling 98,000 hours. Where's the money going? But rather than being fined, the £24m is a penalty, with the sum going towards investment in the water system.

Investment of £20m will target sewage and wastewater flows in "environmentally sensitive areas" or within focused community areas, Ofwat said. Read more:Royal Mail to scrap second-class post on SaturdaysUS-listed Ulta Beauty swoops on high street chain Space NK A further £2m will establish a local fund to tackle sewer misuse and misconnections, which can contribute to pollution, and the final £2m will go towards a nature recovery fund for the area.

If the payment had not been agreed, a penalty would have been applied, and the money would have gone to the Treasury.  The £24m investment package secured is larger than the penalty would have been, Ofwat said. It would have been £19m, 6.5% of South West Water's annual turnover, the watchdog added.

A consultation is now open to the public to offer comments on Ofwat's decision before it is finalised. South West Water's parent company, Pennon, said: "These investments will provide improvements for both customers and the environment alongside our K8 plans to tackle all storm overflows at our bathing and shellfish waters and our highest spilling sites.".