Water companies will have to pay a £157.6 million penalty after missing key targets on reducing pollution, leaks and supply interruptions while customer satisfaction continues to fall, Ofwat has said.
Not one company achieved the regulator’s top category of “leading” while Anglian Water, Welsh Water and Southern Water fell into the lowest category of “lagging” while the remaining 10 were rated “average”.
Chief executive David Black warned companies that a culture shift was required, as “money alone” would not solve the issue.
The industry regulator announced the rebate following its annual review of water and wastewater companies’ performance in England and Wales, which judges their performance each year against the “stretching” targets they set in 2019 for a five-year period until 2025.
If they fail to meet these, Ofwat restricts the amount of money they can take from customers. Ofwat said the figures are provisional until it completes a review process.
It comes against a backdrop of mounting public and political fury at the privatised water sector which is under fire over sewage spills, proposed bill rises and executive bonuses.
David Black, chief executive of Ofwat, 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.
“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.
“As we look towards the next price control, the challenge for water companies is to match the investment with the changes in company culture and performance that are essential to deliver lasting change.”
Labour has said it wants the sector to reduce spills and has even proposed sweeping new laws which could see bosses face up to two years in jail if they obstruct regulators.
The new Water (Special Measures) Bill is designed to lend further credence to regulators so they can take on water companies, with environment secretary Steve Reed adding that a “full review” of the water sector would take place.
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