Southern Water remains one of the poorest performing water companies in England despite making “modest improvements” since receiving the lowest rating last year.

The Environment Agency (EA) says serious incidents are still occurring from the scandal-hit water firm and has blasted the company’s performance as “unacceptable”.

A rating system by the EA grants water companies a maximum four stars after considering each firm’s performance on environmental commitments such as pollution incidents and permit compliance.

For 2022, Southern Water was awarded two stars – an improvement on the previous year’s one star – but still joint bottom out of England’s nine major water companies.

Southern Water has been criticised over a series of wastewater and sewage releases in recent years and was named among the worst-performing companies by the government regulator Ofwat in 2022.

That year, according to the EA, it recorded five major pollution incidents, down by more than half from 12 in 2021, a year in which it was fined a record £90m for dumping billions of litres of raw sewage into the sea at 17 sites, with various spillages around the east Kent coast.

Simon Moody, Environment Agency area deputy director said: “Although we have seen some improvement in Southern Water’s performance, including a significant reduction in the most serious pollution incidents, they remain one of the poorest performing companies in the country. That is unacceptable.

“This year we expect to see them build on the early improvements of 2022 across their entire business and will continue to hold them to account if this is not the case. We cannot transform water quality in the way we all want if water companies’ environmental performance does not improve.

“We will always work closely with water companies who want to do the right thing and take robust action against those who don’t.”

Just eight days ago, Southern Water once again unleashed sewage from overflow tanks across Kent – affecting six beaches in one district and sparking ‘no swim zone’ alerts.

Reacting to the EA report, Lawrence Gosden, Southern Water’s chief executive, said: “This has been a challenging year for our customers and our business. The sector is under intense scrutiny.

“We also face diverse and significant regional and industry-wide challenges of climate change, population growth and the need to upgrade a legacy network of pipes and pumping stations, treatment works and storm overflows to meet increasingly stringent regulatory standards and the expectations of our customers and wider.

“We understand and are responding to these challenges. Whilst we are making progress against the commitments outlined by our new majority shareholder in late 2021 and our April 2023 Turnaround Plan, we recognise the desire of all stakeholders for us to go faster.

“We are directing all our efforts into executing our plans, investing wisely, and employing cutting-edge technology in the right places to highlight risks and to enable us to respond more intelligently and proactively.”