Eleven out of 17 water companies in England and Wales have been fined and forced to give money off customers’ bills.
The companies have been fined for missing their targets resulting in multi-million pound fines which are then given back to customers in the form of bill reductions.
Overall £150 million will be taken from companies and given back to customers in 2023 and 2024, with Thames Water and Southern Water the worst performing. They are being fined £51 million and £28.3 million respectively.
However, this year companies are allowed to increase bills in line with inflation which means these bill reductions may be wiped out.
Which water companies are being fined?
The best performing companies were Severn Trent Water in the South West and United Utilities in the North West. These companies will be permitted to generate an extra £62.9 million and £24.1 million in customer bills respectively.
The following eleven water companies are being fined as follows:
- Affinity Water - £0.8 million
- Anglian Water - £8.5 million
- Dwr Cymru - £8 million
- Hafren Dyfrdwy - £0.4 million
- Northumbrian Water - £20.3 million
- SES Water - £0.3 million
- South East Water - £3.2 million
- South West Water - £13.3 million
- Southern Water - £28.3 million
- Thames Water - £51 million
- Yorkshire Water - £15.2 million
The firms that are allowed to charge more - and how much - include:
- Bristol Water - £0.6 million
- Portsmouth Water - £0.8 million
- Severn Trent Water - £62.9 million
- South Staffs Water £3.3 million
- United Utilities - £24.1 million
- Wessex Water - £4.4 million
Why are companies being fined?
Regulator Ofwat determines whether water firms have kept in line with industry standards at regular intervals. Industry standards include issues such as supply interruptions, pollution incidents and internal sewer flooding.
Over summer, several investigations found raw sewage had been illegally pumped into rivers and the sea around the UK.
Newly-appointed environment secretary Ranil Jayawardena has forced water bosses to set out action on sewage being dumped in rivers and on beaches.
She said: "The volume of sewage spewed out by water companies is completely unacceptable, and the public have rightly shown their outrage. In my first day in office, I told water chief executives that it is not good enough, and I have instructed them to write to me formally with a plan on how they are going to make significant improvements."
Water companies have also faced Britain’s driest summer in years, with droughts resulting in long hosepipe bans.
David Black, the chief executive of Ofwat for England and Wales, said: "When it comes to delivering for their customers, too many water companies are falling short. We expect companies to improve their performance every year; where they fail to do so, we will hold them to account.
"All water companies need to earn back the trust of customers and the public, and we will continue to challenge the sector to improve."
The yearly targets were set at the regulator’s last price review in 2019 and will be in place until the next review in 2025.