Southern Water’s boss has defended plans to increase customer bills by 85% amid recent problems.
Chief executive Lawrence Gosden was questioned about the increase by MPs at the Environment Committee on Tuesday.
Under proposals unveiled in December, Southern Water – which serves Hampshire, the Isle of Wight, Kent and East and West Sussex – plans to raise bills over the next five years more than any other UK water company.
It comes after recent furore over water cuts to customers just before Christmas, a record £90m fine in 2021 for dumping raw sewage into the sea and a £183,600 bonus for Mr Gosden.
He told the committee that the increase in the bill was “just about the country”.
He said the South East of England had been singled out as a water stressed area and highlighted its population.
This has resulted in less rainfall per capita than Namibia, a southern African country that is mostly made up of desert, he said.
“That means we have big investment plans going forward for water resources…,” Mr Gosden told the committee.
“There are very large water sources [requirement] to protect this part of the country from climate change and that is on top of a very important program of environmental development and an investment program to redesign sewage systems.
“There’s actually a two-fold effect of investment in this part of the country because of the state of the region.”
The December fault saw 58,000 Southern Water customers experience disruption [BBC]
Under Southern Water’s proposals, standard household bills will rise from £420 to £768 a year.
An increase of 85% over the next five years is 30% more than the water regulator Offwat suggested was needed in its assessment.
The December announcement came during a major water cut in Hampshire, with 58,000 Southern Water customers facing disruption.
Following the incident, which was suspected to be problems at the point of purchase, the water company said it would spend £9.7m to compensate customers.
‘Flat bills’
Mr Godsen was called before MPs at the committee’s first evidence hearing about its inquiry into the water sector launched last month ahead of Offwat’s price review announcement.
As part of the panel, Mr Godsen was also asked about Macquarie – the company that owns 87% of Southern Water.
He said the company’s record is one of “investing in Southern Water so that the company can return to its position and improve the infrastructure”.
The Australian bank previously owned a majority stake in embattled Thames Water, which it sold in 2017.
“When you look back, especially over the last 10 to 15 years, as with Southern Water, that last decade or 15 years of flat debt has done damage. [to Thames Water],” said Mr Godsen, who previously worked for Thames Water.
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