Severn Trent has escaped paying a fine despite a watchdog finding it had made "serious and unacceptable" breaches of wastewater rules.

Ofwat found the company had "serious failings" in its duties to deal effectively with wastewater and sewage.

Despite this, the regulator said "a financial penalty would not be appropriate" as Severn Trent looked to clean up its act.

Ofwat's investigation found Severn Trent "breached its duties, failing to effectively provide drainage and deal with the contents of its sewers".

The company was also found to have "historically breached requirements of its licence" to have in place processes to meet those duties.

While it now has the right processes in place, the company has been told to "rectify all outstanding issues and ensure future compliance".

Ofwat said Severn Trent has taken steps to address the problems, including a £98 million investment programme to fix them.

The watchdog said spills from storm overflows dropped by 41 per cent in 2025.

Lynn Parker, senior director for enforcement at Ofwat, said: "Our investigation found serious and unacceptable breaches by Severn Trent Water - that is not in question and the company accepts it.

"But their response to those failures sets a standard we expect from all companies: identifying the problem, proactively investing to fix it, and cooperating openly with the regulator.

"The 41 per cent reduction in spills we are now seeing is what genuine accountability looks like in practice.

"We will always act where companies fail their customers and the environment.

"But we will also be clear, publicly, when a company does the right thing."

James Jesic, chief executive, Severn Trent Plc, said: "We're delivering a significant storm overflow spills reduction programme and Ofwat has recognised this in today's decision.

"We accept Ofwat's findings relating to issues that we proactively identified and began addressing these before the enforcement case was opened. By monitoring and investing early to put things right, we are now seeing the benefits, including reducing average storm overflow spills by 41% in 2025.

"Our investment programme in spills reduction continues across our region at pace with the strength of our whole organisation and supply chain behind it. We still have work to do and remain absolutely focused on delivering further improvements for our customers and the environment."