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The UK’s water regulator Ofwat has published its final performance assessment for the 2020–25 investment period, revealing a mixed picture across the sector. The Water Company Performance Report for 2024–25 evaluates service delivery, environmental impact, and customer outcomes across 16 major water and wastewater companies in England and Wales.
According to Ofwat’s official release, Portsmouth Water was the only company placed in the “leading” category, while five companies – including Thames Water, Southern Water, and Dŵr Cymru – were rated as “lagging behind.” The remaining 11 companies were classified as “average,” with some showing improvement over previous years.
The full report highlights both progress and persistent challenges. Notably, internal sewer flooding incidents fell by 29% across the sector, and leakage was reduced by 9% over the five-year period. Drinking water quality remained high, with 99.97% compliance. However, pollution incidents rose by 27%, and customer satisfaction dropped to its lowest level since 2020–21.
Ofwat stated that “companies need to take action to reduce pollution incidents which have increased again in 2024 and are at an unacceptable level”. The regulator also noted that long-duration supply interruptions remain a concern, with some companies repeatedly failing to meet standards.
Financial penalties have been imposed for underperformance, resulting in over £700 million returned to customers since 2020. In the last year alone, more than £260 million was deducted from bills. Enforcement actions have also led to £240 million in financial redress following investigations into wastewater companies. Ofwat says 40% of that money has already been taken off this year’s bills, with the rest to come off next year’s. However bills are still expected to rise significantly until 2030 to fund upgrades to the water system.
Ofwat’s Interim Executive Director Helen Campbell emphasised the need for “leadership, a proactive culture and a clear focus on delivery” to ensure lasting improvements. The sector is now entering a new regulatory period backed by a record £104 billion investment, aimed at enhancing environmental outcomes and securing future water supplies.
The report also acknowledges external pressures such as inflation and the COVID-19 pandemic, which have impacted operational costs and household affordability. Ofwat has introduced new licence conditions and monitoring frameworks to improve customer care and asset management maturity.
The regulator will continue to collaborate with other agencies and use innovation funding to drive sector-wide improvements. The focus now shifts to ensuring that companies deliver on their commitments during the 2025 – 30 period.