Water companies were today ordered to return £158 million to customers through lower bills next year after delivering “disappointing results” on tackling key failings such as sewage pollution.
The industry regulator Ofwat revealed the rebate after its annual review of water and wastewater companies’ performance in England and Wales and called for a change in culture in the industry.
For the second year on the trot, no company achieved the top rating. However,four companies did show an improvement from last year.
Thames Water moved up a category from ‘lagging’ to ‘average’ as it met six of its performance commitments and improved on leakage and water supply interruptions. But it still had to return £56.8 million to customers, more than any other supplier.
Ofwat CEO, David Black said::“This year’s performance report is stark evidence that money alone will not bring the sustained improvements that customers rightly expect.
“It is clear that companies need to change and that has to start with addressing issues of culture and leadership. Too often we hear that weather, third parties or external factors are blamed for shortcomings.
“Companies must implement actions now to improve performance, be more dynamic, agile and on the front foot of issues. And not wait until the government or regulators tell them to act. As we look towards the next price control, the challenge for water companies is to match the investment with the changes in company culture and performance that are essential to deliver lasting change.”
However, he said he was starting to see the first signs of a new culture at water companies with “a more innovative and forward-thinking approach to tackling pollution.”
Ofwat assessed the performance of the 17 largest water and wastewater companies in England and Wales each year against key targets for issues such as sewer flooding, supply interruptions and water leaks.
For the worst performing companies, failure to meet the targets means they will now have to collectively return £157.6 million to customers on their bills for 2025-2026.
However, this is only expected to amount to a reduction of a few pounds on bills compared with the expected long-term increase of £94 per household over the next five years, which Ofwat is currently proposing.
This price rise is still being negotiated with water companies, who argue that even higher bills are needed if they are to afford the infrastructure improvements required to tackle some of the issues raised in this performance report.
