Water companies to return £114m to customers for under-performance

Coming off customers’ bills next year, the rebate follows Ofwat’s assessment of performance against targets set for water companies in 2022/23, with firms in the sector set stretching targets for 2020-25 to deliver better outcomes, for both customers and the environment. Where they fall short on these, the regulator reduces the amount of money companies can collect from customers. 

The water regulator’s decision comes as it publishes its annual Water Company Performance Report, which categorises companies’ performance as “leading”, “average” or “lagging”, against a set of common metrics including pollution incidents, customer service and leakage. This year, no company has been ranked in the “leading” category. 

Meanwhile, ten companies are in the “average” category and seven have been categorised as “lagging”. 

The report also assessed company performance for the three years since the start of the current regulatory cycle, covering 2020 to 2025. Over that time, companies have shown improvements in areas including leakage and internal sewer flooding. 

Despite this, progress has been too slow with fewer than half of companies achieving their performance target on reducing pollution incidents, as well as meeting their performance commitment on leakage, in 2022/23. This performance is matched by an overall decline in customer satisfaction during the past year. 

Ofwat chief executive David Black 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 £114m being returned to customers through bill reductions. While that may be welcome to billpayers, 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.”