We set high expectations for water companies at PR19. We pushed them to go further than ever before, improving efficiency, customer service and resilience. We asked them to share financing gains with customers and to ensure that dividend and executive pay policy is aligned to delivering for customers. We asked them to look well beyond the five-year price review period to meet needs of future customers and protect and improve the natural environment. Our initial assessment of water companies’ business plans for 2020 – 2025 shows how the best companies across England and Wales are rising to these challenges.
Our decisions at a glance
Three companies – Severn Trent Water, South West Water and United Utilities – submitted plans that set a new standard for the sector. We have given these companies the green light, so they can get started on delivering their plans for customers. We will be pushing the remaining companies to go further to achieve the new standard set by Severn Trent Water, South West Water and United Utilities.’
The ‘fast track’ companies are highlighted above
Slow track companies include: Anglian, Welsh water, Northumbrian, Wessex & Yorkshire
The last category ‘Significant scrutiny’ – requires ‘Substantially rework and resubmit plans. Increased regulatory scrutiny’ include Thames and Southern. Click here to read more
Defra ‘Environment Secretary Michael Gove has responded to Ofwat’s initial assessment, saying:
Last year I told water companies the public expects them to devote their energies to cutting bills and reducing leakage rather than avoiding tax and setting up opaque financial structures.
While some companies are responding to this challenge, it is evident from Ofwat’s findings that more action is needed to ensure all companies deliver the best outcome for customers and the environment.
I fully expect the revised plans to be more ambitious. Ofwat has my full support in holding all water companies to account. He has also written a letter to Water UK reiterating his priorities for the water sector. He sets out key tests following Ofwat’s initial assessment of business plans, and outlines where water companies are going in the right direction, and the key areas where they need to improve. In March 2018, the Environment Secretary laid out a challenge to water companies in a speech at Water UK’s annual conference. This was followed up by a further challenge in July, to improve leakage rates reducing this by 50% by 2050.’