Welsh Water contributes more than £1bn to the Welsh economy each year while supporting more than 9,100 jobs across Wales.
An analysis of its economic impact, undertaken by Cardiff University, shows it has a direct impact from its operational and capital activities of £684m with a further £394m generated indirectly through its supply chains.
The company, which employs over 3,000 people in Wales, contributes £500m of GVA (gross valued added) to the Welsh economy - an increase of more than 20% since 2013. The report found that every £1m of Welsh Water’s direct GVA is estimated to support a further £1.27m GVA in the Welsh economy. While 58% of expenditure, equivalent to almost £400m, was retained in Wales - up from £214m in 2013.
The firm supports 50% more people in work across Wales, directly and indirectly, compared to a decade ago including 50 apprentices this year. Direct wages and salaries accounted for £165m, supporting an estimated £3,465 full-time jobs.
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Non-staff expenditure was estimated at almost £520m, with just over £320m of that directed to firms with a base of operations in Wales. The report concluded that Welsh Water, which has three million customers, continues to be an anchor company in Wales and helps anchor other Welsh anchor businesses.
Preliminary financial results for the company for the 2022/2023 financial year show the company posted revenues of £843m up from £810m the previous year. It also recorded an annual loss of £125m as a result of higher financial expenses than last year particularly as costs for energy chemicals and materials rose sharply.
It follows a challenging year for the not-for-profit utility company after extreme weather events, in the form of a drought last summer and freeze thaw in winter, significantly impacted the business.
However, Welsh Water said £400m had been invested in capital projects during the year, with a further £113m in additional funds deployed as a result of its not-for-profit business model which means it doesn’t have to pay dividends to shareholders.
It is also investing a further £13m into social tariffs which could see an extra 50,000 households receive help to pay their water bills. Welsh Water chief executive Peter Perry said: “We know that a lot of our customers are struggling at the moment which is why we have committed to invest £13m to expand our financial support to an extra 50,000 households through our “social tariffs” scheme and our Cymuned fund.
He added: “With a lot of the working households we serve finding that bills are exceeding their income, our Cymuned fund could provide some much needed support.”
The Cymuned fund will help working households where at least one adult is in employment but are struggling to afford the essentials, like their water bill. Eligible households will receive a three month "charge free" period, equating to a discount of around £100-£120 based on an average annual bill.
Following a successful trial in Rhondda Cynon Taf and Denbighshire, the company is rolling the scheme out across its entire operating area. Since Welsh Water was acquired by Glas Cymru in 2001, the company said over £570m of additional investment, social tariffs or bill reductions have been delivered as a consequence of the “not for profit” model.
The company said it also investing an additional £54m in the next two years to identify and reduce leakages as quickly as possible. It follows Welsh Water's decision in May to give customers a £10 refund on their bills after it admitted that water leaks were higher than reported. Industry regulator Ofwat is investigating whether further action is required.
The company has also come under intense scrutiny over its environmental performance after new data revealed it released sewage into rivers, lakes and seas for nearly 600,000 hours last year. It said it has responded with its manifesto for rivers in Wales and a "record" environmental investment. An additional £100m has been allocated to improving river quality - announced in August 2022.
Chair of Glas Cymru Alastair Lyons said: “Following a very challenging year for the company and a turbulent period for the entire sector, I am delighted to see the continued positive impact Welsh Water is having on the economy of Wales. As a company rooted in Wales, we are able to ensure the majority of our expenditure is retained in Wales, jobs are created locally and we are able to bring wider value – both economic and social – to the communities we serve.
“As we prepare our plan for the next price review, PR24, we are focussed on mitigating our impact on the environment, in particular the quality of our river waters, and on improving our service to our customers, reducing leakage and interruptions to supply and avoiding issues with the quality of the water we supply.”
Professor Max Munday of Cardiff University’s Welsh economy research unit said: “Dŵr Cymru continues to play an important role in the Welsh economy. Not only does it support employment but importantly it is the quality of employment that it directly and indirectly supports that does so much to bolster its contribution to the regional economy."
