Ofwat has ordered water firms in England and Wales to cut millions of pounds from household bills after failing to meet pollution, leakage and customer service targets.
The water industry regulator has accused the majority of water companies of “falling short” on the 2020-25 performance measures.
According to Ofwat’s latest company performance report, seven companies are said to be are “lagging” on their targets: Anglian Water, Dŵr Cymru, Southern Water, Thames Water, Yorkshire Water, Bristol Water and South East Water.
In addition, 10 companies were placed in the “average” category, with none able to achieve the “leading” stage.
The report is published annually by Ofwat and judges the companies’ performance in relation to a series of metrics, including pollution incidents, customer service and leakage. As a result of the poor performance, companies have been ordered to pay £114m back to customers. The money will be discounted from household bills over the next year.
Ofwat makes its assessment based on the “stretching” targets set by the regulator in 2019, which were meant to cover the following five years. In cases when the companies fail to meet them, Ofwat restricts the amount of money they can take from customers.
“While that may be welcome to billpayers, it is very disappointing news for all who want to see the water sector do better,” said Ofwat chief executive David Black. “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 for consumers and the environment.”
Of the 17 companies included in the report, Thames Water will have to return the largest amount of money, over £101m. Southern Water follows in second place, having been told to pay back £43m.
The regulator also stressed it was concerned about the “limited levels of detail” some companies provided regarding their efforts on improving river water quality and reducing storm overflows.
“Customers are tired of not getting the service they deserve for the things they care about,” said Mike Keil, senior director at the Consumer Council for Water. “It’s right and fair that people get their money back when they don’t receive the services they were promised by some water companies. People want assurance that their water bill is good value for money.”
Ofwat has said these figures are provisional until it completes the review process. Moreover, the total amount the industry must pay out is partially offset by a handful of companies being rewarded.
“This devastating report demonstrates the complete failure of water companies to act on the sewage scandal,” said Labour shadow environment secretary Steve Reed. “There can be no more damning metaphor for 13 years of Conservative failure than stinking, toxic sewage lapping up on our rivers, lakes, and seas.”
In 2021, a review conducted by the Environment Agency (EA) found that firms in the sector had hit their lowest-ever level with regards to environmental protection while most companies’ performance was declining further still.
Earlier this year, Water UK promised to undertake the largest modernisation of England’s sewer system “since the Victorian era”, which will cut the number of overflows by up to 140,000 each year by 2030, compared with the level in 2020.
An E+T investigation last year found that self-monitoring efforts by water companies were 100 times less likely to find breaches than EA testing of private wastewater treatment plants.
