Regulator Ofwat has launched an investigation into Welsh Water’s leakage reporting for 2020 and 2021 after the company admitted it failed to accurately report leaks across its network, which were much higher than it first recorded. The watchdog said it is looking into what further action needs to be taken over the failures.
Around 1.4m customers of Welsh Water will also be handed a £10 rebate each after the admission. It comes just a day after the watchdog announced a probe into South West Water over the accuracy of data it provides on leakages.
Welsh Water said it will credit the £10 onto the accounts of its 1.3 million household and 100,000 business customer accounts in the coming months, costing it around £14 million in total. It also pledged to spend an extra £54 million on tackling leaks over the next two years, taking total investment on this issue to £284 million over its current five-year spending plan.
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Pete Perry, chief executive of Welsh Water, said: “We are very sorry and disappointed that this has happened. We’re investing an additional £54 million over the next two years to identify and reduce leakage as quickly as possible and we have shared the findings of our investigations with our regulator.
"Whilst our robust assurance process ultimately identified the issue, there were failures in our governance and management oversight processes that allowed this in the first place. We have made the necessary changes to how we manage leakage reporting and closed the gaps in our reporting and governance processes.”
Water giants are coming under heavy criticism across England and Wales for failing to effectively tackle spills in rivers and beaches. The Liberal Democrats’ analysis of Environment Agency data last month revealed “monster” sewage dumps in England’s rivers and seas last year.
Suppliers are under pressure to modernise the Victorian-era sewage networks, but also get on top of the accuracy of their leakage reporting. David Black, chief executive of Ofwat, said: “We are committed to holding companies to account for performance and for sharing timely, accurate, and complete data with us and their customers.
“We recognise that Welsh Water came to us when it became aware of the issue with the accuracy of its performance data. Ofwat’s investigation will consider Welsh Water’s restated performance figures, the circumstances that led to the company reporting inaccurate performance, and what steps it has taken or is taking to address these failings.”
Welsh Water said it had reviewed its leakage reporting over the past 15 months alongside independent experts, which showed leakage has been running “at a much higher level than was previously recognised the company”.
The Consumer Council for Water (CWW) said Welsh Water will need to rebuild trust in the group among its customers.
Emma Clancy, chief executive of the Consumer Council for Water (CCW), said: “We recognise Welsh Water has moved swiftly to admit its mistake and the £10 rebate will go some way to reassuring its customers that it regrets the damage this will have caused to people’s trust in it. Customers will want the company to take the right steps to ensure this doesn’t happen again.
“Our research shows leakage from water companies affects customers’ own motivation to save water so Welsh Water will need to build trust on this issue.”
Welsh Conservative Shadow Minister for Climate Change, Janet Finch-Saunders MS, said: “It is concerning it is also welcome that Ofwat are now investigating Dwr Cymru, after they failed to accurately report leaks across its network, which were much higher than it first recorded.
“Whilst the gesture of a refund to compensate customers is welcome, a £10 rebate does little to assure people, their beaches and rivers will be cleaner, as they prepare for holidays in Wales this summer.
"The Labour Government need to get a grip on this issue and hold the company to account, they still haven’t published their much-needed storm overflow report. Labour continues to turn a blind eye to sewage being dumped in Wales.”
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