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Under-fire water sector pledges to fix pollution issues and create jobs

Water firms have pledged to create thousands of jobs and support vulnerable customers as part of their five-year investment plan, with aims to tackle pollution issues that have seen the sector come under recent heavy fire.

Stock market listed companies Pennon, which owns South West Water, United Utilities and Yorkshire Water were among those to outline their proposals under the wider industry’s £96 billion investment plans from 2025 to 2030, which will see customer bills jump by up to £156 a year.

Pennon said it would create 2,000 jobs and invest around £2.8 billion over the second half of the decade in water quality and resilience “with a pledge to fix storm overflows at beaches and eradicate pollutions”.

United Utilities also put forward a total spending plan of £13.7 billion for the five-year period, including a promise to create 7,000 new jobs across the North West and support customers with affordability schemes worth £525 million.

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Yorkshire Water added that it would invest £7.8 billion and Welsh Water promised £3.5 billion in the programme.

Severn Trent said on Friday last week that it would look to raise £1 billion to help support a transformation plan that is set to create 7,000 jobs across the Midlands.

The water supplier outlined plans to spend £12.9 billion in supporting its network over the next five-year regulatory period.

Shares in the firms lifted after the proposals were announced, despite uncertainty over whether industry regulator Ofwat will approve the plans.

Pennon lifted 4%, United Utilities was 3% higher and Severn Trent rose 2% in morning trading on Monday.

But the sector has come under heavy criticism in recent months for its performance, with water quality and sewage overflows becoming a hot political issue.

Last week, Ofwat said water companies would have to pay out £114 million to bill-payers after failing to meet key targets on reducing pollution, leakage and supply interruptions, with customer satisfaction also continuing to fall.

It found that fewer than half of water companies reached their target on reducing pollution or met their commitment on leakage over the last year.

Not one company achieved the regulator’s top category of “leading” while Dwr Cymru, Southern, Thames, Anglian, Bristol, South East and Yorkshire Water fell into the lowest category of “lagging” and the remaining 10 were rated “average”.

Thames Water was revealed to be the company that must return the most – at more than £101 million – followed by Southern Water, which must pay out £43 million.

Earlier this year, significant financial instability at debt-laden Thames Water drove calls for political intervention and nationalisation of the sector amid questions over the financing of the industry.

Shareholders in Thames Water – which is suffering under the weight of a £14 billion debt pile – agreed to inject £750 million of new funding to bolster the firm’s finances and stave off the threat of nationalisation.