Water firms ordered by Ofwat to pay back customers more than £157m

Water firms in England and Wales have been ordered to return £157.6m to customers due to their poor performance.

Ofwat said the rebate would come off bills for households and businesses in 2025-26.

Last year, the water regulator ordered firms to repay £114m as part of a similar move.

Ofwat said the results of its annual report on water company performance showed “disappointing results” and that money alone was not enough to address the problems facing the industry.

The regulator also warned that firms were “falling further behind on key targets”, with nine out of 11 suppliers experiencing an increase in “pollution incidents” in 2023.

It comes as water bills in England and Wales are set to rise by an average of 21% over the next five years.

Ofwat’s chief executive David Black said: “This year’s performance report is stark evidence that money alone will not bring the sustained improvements that customers rightly expect.

“It is clear that companies need to change and that has to start with addressing issues of culture and leadership. Too often we hear that weather, third parties or external factors are blamed for shortcomings.”

He added: “Companies must implement actions now to improve performance, be more dynamic, agile and on the front foot of issues. And not wait until the government or regulators tell them to act.”

Ofwat’s report also found that while there had been progress made on leaks, firms had only managed a 6% annual reduction – against a target of 16% by 2025.

Four water companies – South East Water, South West Water, Thames Water and Yorkshire Water – were upgraded by the regulator from “lagging behind” to “average”, but it said performance improvements were inconsistent across the sector.

Anglian Water, Dŵr Cymru Welsh Water and Southern Water were all categorised as “lagging behind”.

Earlier this summer, the regulator announced it was investigating all wastewater companies due to concerns that some may not be meeting their obligation to minimise pollution.

Last year, industry body Water UK apologised on behalf of firms for “not acting quickly enough” on spills.

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