Water companies in England and Wales have been ordered to return £114m to customers through lower bills next year because progress on leakage and sewage spills has been “too slow”.
In its annual water company performance report, the regulator Ofwat said the majority of water and wastewater companies were underperforming ontargets set for 2020 until 2025 to deliver better outcomes, for customers and the environment.
Companies are judged against metrics including pollution incidents, customer service and leakage. This year, no company has been ranked in the “leading” category, and 10 companies are in the “average” category, while seven are “lagging” – Anglian Water, Dŵr Cymru, Southern Water, Thames Water, Yorkshire Water, Bristol Water and South East Water.
Since 2020, companies have shown some improvement in areas including leakage and internal sewer flooding and all but one company achieved the performance level for unplanned water outages last year. However, progress has been “too slow,” Ofwat said.
Over the past year, fewer than half of companies achieved their performance target on reducing pollution incidents and most companies reported an increase in annual leakage over the past year. There has also been an overall decline in customer satisfaction. Most companies have not fully invested their 2020-2023 allowed funding to improve their performance.
Water companies such as Thames Water have been repeatedly fined for discharging raw sewage into rivers and seas. Firms are under huge pressure to invest in ageing infrastructure, and high interest rates have raised the cost of servicing their billions of pounds of debt.
David Black, the Ofwat chief executive, said: “The targets we set for companies were designed to be stretching – to drive improvements for customers and the environment. However, our latest report shows they are falling short, leading to £114m being returned to customers through bill reductions. While that may be welcome to billpayers, it is very disappointing news for all who want to see the sector do better.
“It is not going to be easy for companies to regain public trust, but they have to start with better service for customers and the environment. We will continue to use all our powers to ensure the sector delivers better value.”
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Ofwat is investigating all 11 water and wastewater companies and there are live enforcement cases for six companies for potential failures on sewage discharges into the environment. There are live enforcement cases into Dŵr Cymru and South West Water in relation to the accuracy of reporting of leakage and per capita consumption performance.
