Water companies in England and Wales will have to return nearly £158m to customers through rate reductions next year after further delays in meeting key targets including sewage spills and leaks.
Regulator Ofwat announced penalties as part of that. Annual review of company performance. The report found that companies reduced wastewater spills by just 2% from 2020 to 2024, well below the target of 30% for the 2020-25 period.
When it comes to breaches, companies have so far only achieved a 6% reduction, compared to a target of 16% by 2025. Customer satisfaction has deteriorated further and is now at its lowest level since Ofwat began measuring it in 2020.
“This year's results report is clear evidence that money alone will not deliver the lasting improvements that our customers rightly expect,” Ofwat chief executive David Black said.
“It is clear that companies need to change, and this must start by addressing issues of culture and leadership. I listen carefully.”
Since 2020, performance penalties have totaled more than £430m.
Environment Secretary Steve Reid said: “Our waterways should be a source of national pride, but years of pollution and lack of investment have left them in a dangerous condition. The public deserves better recognition.”
He said the government was making water companies subject to special measures through the Water Bill, which would “prohibit the payment of bonuses to managers who pollute water and impose new criminal charges on persistent lawbreakers.” “Regulations will be strengthened, including additional powers.”
Mr Reid said the government would carry out a complete review of the water industry and develop further legislation that would “fundamentally change the way our entire water system works and clean up our rivers, lakes and oceans forever”. .
In 2023, 9 out of 11 water and wastewater companies experienced an increase in sewage spills, and only one company achieved performance commitment levels. Ofwat said almost half of the companies will meet their targets in 2022, with four companies exceeding their targets by more than 10%, showing that better performance is achievable.
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The regulator has divided 17 water companies in England and Wales into three categories: 'leading', 'average' and 'laggard'. No “strong” companies were found. Anglian Water, Dol Simr and Southern Water were found to be behind.
Thames Water, which has £15bn of debt and faces the possibility of bankruptcy, was one of four companies to move from being a 'laggard' to an 'average company'. . But Mr Ofwat said: “Despite this single-year improvement, we have serious concerns about Thames Water's performance.”
The Thames and Southern Rivers have been ranked worst for customer satisfaction for the fourth year in a row.
Black said there are signs that some companies are starting to change their culture. He pointed out that Severn Trent has made 617 improvements at 467 locations and is taking steps to reduce sewage overflows. “More companies need to show a similar sense of urgency and action,” he added.
