SEVERN TRENT WATER LIMITED
Company number: 02366686
Reporting period:
1 April 2025 to 30 September 2025
Report filed on:
30 October 2025
Approved by:
Helen Marie Miles
Contracts and payments
Do any of this business's construction contracts with its suppliers include retention clauses? Yes
Payment statistics
Average time taken to pay invoices: 37 days
Total value paid:
- within 30 days: £985,255,300 (71%)
- in 31 to 60 days: £318,385,133 (23%)
- in 61 days or more: £75,634,784 (5%)
Invoices paid:
- within 30 days: 76%
- in 31 to 60 days: 20%
- in 61 days or more: 4%
Late and disputed:
- total value of payments due in the reporting period which have not been paid within the agreed period: £180,641,110
- payments due in the reporting period which have not been paid within the agreed period: 7%
- not made in the reporting period due to a dispute: 0%
Payment terms
Shortest standard payment periods
15 days
Longest standard payment period
60 days
Standard payment terms
Severn Trent Water’s standard payment term for new contracts is 60 days (or 30 days for businesses with less than 50 employees); this applies across all contracts raised and would be agreed with suppliers prior to the commencement of the trading activity.
On occasion, authorisation may be granted to reduce the payment terms below 60 days if there is commercial requirement/benefit in doing so. Such a change requires approval from the Commercial team. We would not attempt to impose payment terms longer than 60 days on any of our suppliers, nor do we use early settlement discounts as part of contractual arrangements.
Were there any changes to the standard payment terms in the reporting period?
No
Were suppliers notified or consulted about these changes before they were made?
N/A
Maximum contractual payment period agreed
90 days
The maximum contractual payment terms of 90 days falls outside our current standard payment terms. These terms are only used for older contracts which have not yet fallen due for renewal.
Any other information about payment terms
N/A
Retention clauses
How does this business use retention clauses?
Retention clauses are used in specific circumstances:
Severn Trent Water (STW) enters into large numbers of qualifying construction contracts, mainly as an employer. It utilises a series of different terms and conditions dependent upon the complexity, value and nature of what is being constructed. STW uses, amongst other terms, NEC and JCT based contracts. Some of STW’s qualifying construction contracts do contain retention clauses, either as secondary options, such as the NEC X16, or as standalone provisions to drive supplier behaviours, such as in relation to timely provision of programmes and/or warranties.
When considering whether to include retention clauses, STW will consider, amongst other things:
• The form of contract utilised;
• The size and nature of the works;
• Whether a supplier is party to a longer-term framework agreement or whether it is a one-off, standalone contract;
• The size and trading history of the supplier;
• The existence and size of any relevant guarantor; and
• Whether there are third parties in need of warranties.
Does this business only use retention clauses in construction contracts above a specific contract sum?
No
Does this business use a standard percentage rate in retention clauses?
No
Does this business apply retention clause practices that are no more onerous than those applied to it on the same project?
No
Releasing money under a retention clause
Process for releasing money this business has deducted or retained under a retention clause
In the majority of cases, for programmes, once the Contractor has submitted a revised programme showing the information which the contract requires, the Project Manager will release any retained monies in subsequent assessment periods. A similar process is followed where retention clauses relating to provision of warranties are included. Where there are Work Order Incentive Payments, any retained amounts due to the Contractor are released once the Defects Certificate is issued or upon termination. Where secondary option X16 is utilised, the amount retained is halved (a) in the next assessment made after Completion of the whole of the works or (b) in the next assessment after the Client has taken over the whole of the works if this is before Completion of the whole of the works. The amount retained remains at this amount until the date when the Defects Certificate is due to be issued. No amount is retained in the assessments made after the Defects Certificate is due to be issued.
Is the money released in stages?
Yes:
In the majority of cases, for programmes, once the Contractor has submitted a revised programme showing the information which the contract requires, the Project Manager will release any retained monies in subsequent assessment periods. A similar process is followed where retention clauses relating to provision of warranties are included. Where there are Work Order Incentive Payments, any retained amounts due to the Contractor are released once the Defects Certificate is issued or upon termination. Where secondary option X16 is utilised, the amount retained is halved (a) in the next assessment made after Completion of the whole of the works or (b) in the next assessment after the Client has taken over the whole of the works if this is before Completion of the whole of the works. The amount retained remains at this amount until the date when the Defects Certificate is due to be issued. No amount is retained in the assessments made after the Defects Certificate is due to be issued.
Amount retained from suppliers in the reporting period
Amount retained stated as a percentage of the money retained from this business by its clients
100%
Amount retained stated as a percentage of the total construction payments made by this business
0%
Dispute resolution process
If communication between the purchaser and supplier fails to resolve the dispute, the Severn Trent Commercial or Finance team will engage with the supplier and the business user to bring about a resolution.
Other payment information
Has this business signed up to a code of conduct or standards on payment practices? If so, which?
For example, signatories to The Fair Payment Code must commit to paying 95% of their invoices within 60 days.
No, this business has not signed up to a code of conduct or standards on payment practices.
Does this business offer e-invoicing in relation to qualifying contracts?
This is where suppliers can electronically submit and track invoices. It's not just allowing suppliers to email them an invoice.
Yes
Does this business offer supply chain finance?
This is where a supplier who has submitted an invoice can be paid by a third-party finance provider earlier than the agreed payment date. The business would then pay the finance provider the invoiced sum.
No
Under its payment practices and policies, can this business deduct sums from payments under qualifying contracts as a charge for remaining on a supplier list?
No
During the reporting period, did the business deduct sums from payments as a charge for remaining on a supplier list?
No