26 September 2023 , 08:22
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Water companies have been ordered to pay back £114million to customers through lower bills next year after failing to meet key targets.
The regulator Ofwat judges water companies in England and Wales each year on how they deal with issues such as leakages, supply and reducing pollution. Ofwat said no firm achieved its top category of “leading” in its annual check. If water companies fail to meet targets, Ofwat restricts the amount of money they can take from customers.
Dwr Cymru, Southern, Thames, Anglian, Bristol, South East and Yorkshire Water fell into the lowest category of “lagging” and the remaining ten firms were rated as “average”. Thames Water has 15 million customers and will return £101million, followed by Southern Water, which serves 4.6 million people and will pay out £43million.
The total industry amount of £114million is offset by some companies being rewarded for having performed sufficiently, such as Severn Trent Water £88million and United Utilities taking £25million. Ofwat said these figures are provisional until it completes the review process. Over the last year, fewer than half of water companies reached their target on reducing pollution or met their commitment on leakage.
David Black, Ofwat CEO, 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 £114 million being returned to customers through bill reductions.
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“While that may be welcome to bill payers, 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.”
Mike Keil, senior director at the Consumer Council for Water, said: “Customers are tired of not getting the service they deserve for the things they care about. 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.”
Water bills in England and Wales rose by 7.5% on average this year, taking the typical annual cost to £448 a year. Some households have seen their bills rise more or less than this average figure.
Companies that have to give back money to customers are:
- Affinity Water
- Anglian Water
- Dŵr Cymru
- Hafren Dyfrdwy
- Northumbrian Water
- SES Water
- South East Water
- South West Water (South West area)
- South West Water (Bristol area)
- Southern Water
- Thames Water
- Yorkshire Water
Firms that have performed sufficiently and can charge more are:
- Portsmouth Water
- Severn Trent Water
- South Staffs Water
- United Utilities
- Wessex Water
A Water UK spokesperson said: "Today’s figures show that, in many areas, there have been significant improvements since the start of the decade. There were fewer incidents of serious pollution and less leakage from our ageing water infrastructure. However, companies recognise there is still much more to do to meet the regulator’s ever-tightening targets.
"Ensuring the security of our water supply in the future while protecting the environment will take significant investment. That’s why water companies in England and Wales are proposing record levels of investment over the rest of this decade, with detailed plans set to be published next week."