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Water companies have been ordered to return £158 million to customers through lower bills next year after missing key targets on issues such as pollution and leaks.
Industry regulator Ofwat announced the rebate following its annual review of the performance of water and wastewater companies in England and Wales.
Ofwat said customer bills will be reduced in 2025-26 to reflect the penalties, with full refunds calculated in December.
Missed targets: Industry regulator Ofwat has ordered water companies to return £158m to customers through lower bills next year.
But the fines are only likely to reduce bills by around £2 a year at most, as any reduction will be offset by an average increase in water bills of around £94 in England and Wales over the next five years. .
No company reached the regulator’s top ‘leader’ category, while Anglian Water, Welsh Water and Southern Water fell into the lower ‘laggard’ category and the remaining ten were rated ‘average’.
Ofwat judges the performance of water companies each year against the “scale-up” targets they set in 2019 for a five-year period to 2025.
If they do not comply, the watchdog restricts the amount of money they can receive from clients.
Ofwat said the figures are provisional until it completes a review process.
Water companies reduced pollution incidents by just 2 percent, compared to a target of 30 percent.
Thames Water was upgraded from ‘laggard’ to ‘average’ as it met some performance targets for leaks and supply disruptions.
Despite this, the heavily indebted London water supplier will have to pay £56.8 million, the largest fine for the fourth year in a row.
Anglian Water’s fine is £38.1 million, Yorkshire Water’s is £36 million and Southern Water’s is £31.9 million. Household bills are unlikely to drop much.
The biggest fine, of £56.8m for Thames Water, will only amount to a couple of pounds off each customer’s bill, which is expected to rise by £99 over the next five years.
David Black, chief executive of Ofwat, said: “It is clear that businesses need to change and that has to start with addressing issues of culture and leadership.”
Too often we hear that deficiencies are attributed to the weather, third parties or external factors.’
The Labor Party has proposed laws that could sentence bosses to up to two years in prison if they obstruct regulators.
Environment Secretary Steve Reed said the Government would carry out a full review of the sector.
On Monday, an Environment Agency report found that almost a fifth of water supplies are lost through leaks before reaching customers’ taps.
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