Water firms ordered to pay back £158m to customers - but activists say it still 'falls short' as 'polluting' companies 'falling further behind on key targets'
Water firms in England and Wales have been ordered to return £157.6m to customers due to their poor performance.
Ofwat said the money would come off bills for households and businesses in 2025-26, with the total rebates set to be calculated in December. 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. 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 six per cent annual reduction – against a target of 16 per cent by 2025. However, 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, Welsh Water and Southern Water were all categorised as "lagging behind". No firm managed to achieve the regulator's top rating of "leading".
CEO of River Action James Wallace said £157.6m “might sound like a lot of money but frankly it is a drop in the ocean for polluting water companies that have handed billions in dividends and interest payments to investors.” He added: “The new government is taking some positive steps, including a review of the water sector and the introduction of a Water Bill. However, we believe the bill, as currently drafted, falls short.
“Where is the duty on Ofwat to prioritise the environment and penalise pollution? When will we see failing water companies like Thames Water put into special administration? Polluters can no longer be allowed to operate with impunity. The time for action is now. Join River Action, Surfers Against Sewage and a coalition of hundreds of organisations and communities on November 3 for the March for Clean Water in London. Together, we will wear blue, flood the streets and demand the government stops the poisoning of Britain’s rivers, lakes and seas.”