Ofwat has published its annual assessment of company operational performance and a summary of the financial resilience of companies. Both the Water Company Performance report 2021-22 and the Monitoring Financial Resilience report 2021-22 have identified areas where water companies are letting down their customers, and the environment.

Water company performance report 2021-22

Northumbrian Water, Southern Water, South West Water, Thames Water, Welsh Water and Yorkshire Water have been named as the worst performing companies operationally. Ofwat required these companies to return almost £120m to customers in November 2022.

Despite some improvements across the industry, Ofwat is deeply concerned by those that are lagging behind expectations and these companies are now required to explain what has led to their poor performance and present a clear action plan to turn this around. Ofwat expects to see companies delivering on their commitments to customers.

In addition to these improvement plans for specific areas of performance failure, Ofwat will also consider whether poor performance is indicative of any wider compliance issues, which could in turn lead to potential enforcement action if issues are identified.

Across all companies there are broad trends in their performance over 2021-22:

• There is encouraging progress on leakage which is now at its lowest level since privatisation. We expect companies to continue to reduce leakage at pace if the sector is to meet its commitment to reduce leakage by 50% from 2017-8 levels by 2050.
• The number of serious pollution incidents increased. As a result of poor performance in pollution incidents generally, Ofwat confirmed in November 2022 that companies will have to return almost £17m to customers. In November 2021, we opened an investigation into all wastewater companies in England and Wales, with six enforcement cases against companies where we have the greatest concerns.
• The majority of companies have seen a drop in their customer satisfaction. Ofwat intends to introduce a condition in all companies’ licences to increase companies’ customer focus and incentivise the very best service for customers.

David Black, CEO said: “In too many areas, water and wastewater companies are falling short when it comes to looking after customers, the environment and their own financial resilience. We are clear; these companies need to address this unacceptable performance as a matter of urgency.”

Responding to the publication, Christine McGourty, Water UK Chief Executive, said: “There are areas of good performance right across the sector, but this report clearly shows there’s more to do for water and wastewater companies to meet the stretching targets of the regulators, as well as the high expectations of the public.”

Coverage of the story was extensive, including the BBC and Guardian.  Further information from Ofwat can be found here.