Severn Trent was formed in 1974 as a regional, state-owned water authority based in Birmingham and responsible for water management and supply, and waste water treatment and disposal, in the catchment areas of two of Britain's greatest rivers - the Severn and the Trent. It was from these rivers that it took its name.
In the 18th century, responsibility for water supply and waste water treatment was shared between local Government and private companies. Suppliers of water treatment and waste water disposal each had different powers, charges and resources for investing in pipes (many of which were made of stone or even wood).
The 19th century saw the proper organisation of local Government. As a result, many boroughs acquired powers to purchase their local water company. Nonetheless, the variety of different suppliers for water supply and sewage treatment created inefficiencies throughout the industry.
By 1973, 29 river authorities covered England and Wales with 160 water supply undertakings and no less than 1,300 sewage treatment authorities. There was serious lack of investment in the distribution infrastructure and smaller undertakings did not lend themselves to economies of scale.
The Water Act of 1973 brought together the many water and sewerage undertakings in England and Wales into ten water authorities, each responsible for water supply, sewage treatment and river protection within its area. Each was led by a board with representatives from local authorities and central Government.
Severn Trent Water Authority was one of these ten authorities and took over in 1974. By the mid 1980's, however, the Government had decided to privatise the water industry. This enabled the private sector to inject much needed cash into the industry through loans and the issue of private shares. The ten water authorities were sold as water service companies and passed into private ownership in 1989.
1989 also saw the formation of Severn Trent Plc, the parent company for Severn Trent Water. As a private company, Severn Trent Water invested heavily in replacing and repairing its assets and infrastructure. As well as complying with Government legislation it set its own internal standards on issues such as public health, leakage reduction and the cleanliness of rivers and other water sources in its catchment region.
The water industry is regulated by OFWAT (Office of Water Services) and controlled by other bodies such as the Environment Agency (EA) and the Drinking Water Inspectorate (DWI).
In 1991 Severn Trent Plc extended the group portfolio by acquiring Biffa, now the UK's largest single supplier of integrated waste management services in the UK.
The group also began to build a products and services business in the US beginning with the acquisition of Capital Controls Company in 1990. Since that time, Severn Trent Plc built a portfolio of companies mainly in the US, UK and parts of Europe designed to analyse, treat, measure, deliver and protect water resources.
2006 has marked the launch of the new strategic direction for Severn Trent. In April we announced our intention to demerge Biffa, our waste business, and in June we outlined other elements of our strategy to focus on water. Our comprehensive review revealed that both companies would flourish better apart, each benefiting from the undivided attention of its own Board. In addition the synergies in offering combined environmental services between Severn Trent Water and Biffa are not substantial enough to keep the two companies together.
In September 2006 Severn Trent announced the sale of its US analytical environmental testing firm Severn Trent Laboratories (STL) to TestAmerica Holdings, an affiliate of H.I.G. Capital. The sale was confirmed on 29 December 2006, STL UK will remain part of the Severn Trent group.
Today the group's strategic drive is to create value through a focus on water
