Severn Trent in hot water

Severn Trent Water admitted today it had suffered "a bad year" after scoring the worst complaints record of any water firm in the UK.

It comes just months after the West Midlands firm was pilloried for having the country's worst records for leakages, with more than 100 million gallons gushing from its pipes.

It narrowly escaped hefty fines – of up to £100 million – from the water watchdog Ofwat last year for failing to meet customer service standards.

And that came after Severn Trent was ordered to repay its eight million customers because of £42 million-worth of overcharging, a scandal that saw the company at the centre of a Serious Fraud Office probe into the data Severn Trent Water supplied to water regulator, Ofwat, that was used to calculate how much it could charge its customers. This year Severn Trent escaped another big fine from Ofwat because of its poor record on leaks, after agreeing to spend more money on fixing its pipe network.

The company is already facing costs of up to £35 million from the summer flooding crisis. Although insurance payouts of up to £20 million will offset part of this, Severn Trent has said it expects the floods to punch a £12 million hole in its revenues this year.

But, while customers, Ofwat and the Consumer Council for Water may be unhappy with Severn Trent, its shareholders have less reason to carp.

In June the water company's parent group, Severn Trent plc, revealed annual profits of £413 million and hiked payouts to shareholders by 7.8 per cent, to 61.45p per share.

The Black Country's other water company, Walsall-based South Staffordshire, has managed to combine healthy profits with a far better record on service. Last year it was hailed by Ofwat as one of the industry's top three performers for customer service.

In today's Consumer Council for Water report, South Staffordshire Water was one of the good guys, cutting complaints from 3,186 last year to 2,825 this year. This gave it a figure of 51 complaints per 10,000 customers.