Personal Finance

The 11 water companies forced to reduce bills by total of £150m

NimbleFins digs into the news that water companies in England and Wales have been ordered to reduce bills for customers after failing to hit targets.

The majority of water companies in England and Wales have been ordered to reduce bills for customers after failing to hit targets.

Ofwat has fined 11 water suppliers a total of £150 million after missed targets on areas including water supply interruptions, pollution incidents and internal sewer flooding.

Thames Water and Southern Water were the worst performers across 2021/22 and must reduce bills by nearly £80m.

Others have performed better and six companies have been given permission to increase bills should they wish. Severn Trent Water, for example, has exceeded targets in areas such as biodiversity, Ofwat said.

Any changes to charges will come into effect in 2023/24.

However, Ofwat also confirmed all water suppliers are allowed to increase bills in line with inflation, minus the fines. They will use the Consumer Prices Index including owner occupiers’ housing costs (CPIH) which was recorded as 8.6% in August, meaning some savings for customers could be offset by the inflationary rises.

The newly announced fines are currently drafts and will be reviewed and confirmed by the end of the year.

Water suppliers forced to cut costs:

  • Thames Water: £51m
  • Southern Water: £28.3m
  • Northumbrian Water: £20.3m
  • Yorkshire Water: £15.2m
  • South West Water: £13.3m
  • Anglian Water: £8.5m
  • Dŵr Cymru: £8m
  • South East Water: £3.2m
  • Affinity Water: £0.8m
  • Hafren Dyfrdwy: £0.4m
  • SES Water: £0.3m

Water suppliers allowed to raise prices:

  • Severn Trent Water: £62.9m
  • United Utilities: £24.1
  • Wessex Water: £4.4m
  • South Staffs Water: £3m
  • Portsmouth Water: £0.8m
  • Bristol Water: £0.6m

During the heatwave this summer, it emerged many water companies were sending raw sewage water into the sea and waterways.

Some areas were so dangerous to the public the Environment Agency urged people not to swim in certain areas. The warning covered more than 40 beaches including some in Cornwall, Devon, Dorset, Sussex, Isle of Wight and Essex, after heavy rain overwhelmed sewage systems, the i reported.

Last month, Southern Water was found to have released raw sewage into almost 30 bathing sites in a 24 hour period, the BBC reported.

It had also discharged sewage on 95 occasions within the first week of September.

In a statement at the time, Southern Water said: "Rain can overwhelm the combined sewer and drainage system which exists in many parts of our region. To protect homes, schools and businesses from flooding, storm overflows act as a release valve and release excess water into the sea. These discharges are heavily diluted, typically being 95% rainwater. There are around 15,000 storm overflows in England and approximately 1,000 in our region."

Meanwhile households were given hosepipe bans as water supplies dwindled.

Southern Water, South East Water, Welsh Water, South West Water, Thames Water and Yorkshire Water all imposed hosepipe bans in August.

David Black, Ofwat CEO, said: “When it comes to delivering for their customers, too many water companies are falling short, and we are requiring them to return around £150m to their customers.

“We expect companies to improve their performance every year; where they fail to do so, we will hold them to account. The poorest performers, Southern Water and Thames Water, will have to return almost £80m to their customers. All water companies need to earn back the trust of customers and the public and we will continue to challenge the sector to improve.”

A Southern Water spokesperson told Sussex World: “As laid out in our annual report, we recognise that Southern Water has not always met expectations in recent years but are now in a position to deliver significant change for our customers and the environment.

“This includes investing £2 billion (c.£1,000 per household) between 2020-25, more than our regulatory allowance, to significantly improve our performance.

"We are on track to reduce pollutions by 40% compared to 2021 with much still to be done to maintain this to the end of the year, and we are also industry leading in self-reporting.”

Thames Water said it would be spending an additional £2 billion to "improve outcomes for customers, leakage and river health".

Warren Buckley, customer experience director at Thames Water, said: "We're already accelerating the customer elements of our turnaround plan to improve our position. While we're heading in the right direction, we know there is a long way to go."


Our team of writers has expertise in business, car, travel, home and pet insurance as well as personal finance issues.


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