This only came to light because local man David Donnelly, a finance manager with Severn Trent, had the courage to expose this scam. The company originally sought to downplay its significance, yet quietly let all the key executives "move on".
It is vital that customers of essential services have confidence in both their supplier and its regulator. Mr Donnelly has exposed a lack of good governance in a company where the public have a right to expect the highest standards of honesty and reliability.
I am concerned that the board of Severn Trent Plc appear to have been exonerated rather than having to face the music for presiding over this shambles. It is indeed ironic that the then chairman was at the same time leading the Government's Better Regulation Taskforce!
The regulator also has questions to answer. Why did OFWAT rely on Severn Trent's own auditors to investigate financial irregularities? Why did it take OFWAT over a year to act and nearly another year to reach its conclusions? Can the public have confidence that its successor, from next month the Water Services Regulation Authority, is not being deceived by other water companies, especially since this only came to light thanks to a whistleblower?
If we cannot trust our water company, who can we trust?
