Southern Water Plans for Hastings Evoke Sceptical Response
PAUL MCLAUGHLIN
In the week when Southern Water unveiled “ambitious, multi-million pound investment plans” to upgrade water infrastructure and quality across Hastings, Moody’s, the global rating agency, downgraded the privatised water company’s credit rating to “junk”, citing a “history of material operational and financial underperformance”, pushing the heavily indebted utility to the verge of default.
The two announcements highlight the contrasting views of Southern Water. On one side, a company that consistently promises significant service improvements, while on the other, the all-too-familiar reality of poor service delivery and financial fragility.
Southern Water is controlled by the Australian-based Macquarie Asset Management. It is among the UK’s most indebted water companies, having accrued debts of more than £6bn since it was privatised debt-free in 1989. On the other hand its CEO, Lawrence Gosden, draws an annual salary of close to half a million pounds, topped up with a bonus of £183,000, which with other benefits and pension contributions saw him pocket over £700,000 last year.
Meanwhile its disastrous performance in Hastings over recent years has been catalogued regularly in HIP: two major floods of the town centre; continual sewage discharges into the sea, as well as into people’s homes and gardens, and water outages leaving thousands of residents having to rely on bottled water for several days at a time.
Resilience
A £40m “resilience case” has been put to Ofwat, the water regulator. The plan aims to improve service levels in all three key areas of recent default: water cleanliness and sewage; flooding; and water outages. The proposals include improvements to water supply works at Beauport and Brede, refurbishment of reservoir pumps and valves at the Darwell site, and upgrades to the main water supply pipe which connects it to Brede. They will also include a new reservoir at Newgate and installation of 25km of new water mains and associated pressure management technology in the Hastings area, along with the refurbishment of 500 metres of critical sewers, with planned upgrades of Rock-a-Nore and Galley Hill pumping stations, plus actions to better manage surface water challenges at Alexandra Park to lessen risk of flooding. There are to be ongoing works to improve bathing water quality with accelerated investment plans to improve storm overflow performance in Bexhill and Hastings.
PUBLIC MEETING
The company held a public meeting in Muriel Matters House last Monday (11 November), attended by Southern Water’s senior management team, to unveil these plans. Making the key presentation, Mr Gosden promised that they would “transform water quality over the coming decades”. He said his company has been working closely with the local community, Hastings Borough Council and other partners, in putting together “this important action plan”, adding that he was “confident that it will live up to our customers’ expectations.”
But councillors who turned up to the presentation were far from placated. Former Council Leader Paul Barnett dismissed the investment plan as nothing more than a “shopping list of what was affordable and realistic”, failing to address “what investment Hastings actually needs.” Cllr Helen Kay expressed her concerns that much of the work to improve storm overflows was not due to begin until 2027. Cllr Sorrell Marlow-Eastwood suggested that Southern Water’s priority to install smart meters was for the benefit of the company, while deflecting resources away from making improvement to the wider infrastructure of the town.
Councillors from across the party political spectrum criticised the company for failing to offer adequate compensation to citizens who have been negatively impacted. Cllr John Cannan captured the mood of the meeting when he said there was a widespread lack of trust, with the company repeatedly claiming to have fixed major problems whilst walking away with its fingers crossed hoping the solutions work.
Southern Water’s plans for Hastings are in fact dependent on Ofwat approving its 2025-30 business plan, which proposes that a £7.8bn investment be funded by a sharp rise in bills for consumers. A decision by the water regulator is due on 19 December, and its approval is by no means guaranteed. The Labour Government has made it clear it wants Ofwat to be much tougher with the water companies than it has been in previous years.
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