Water companies set to repay £150 million to customers over failings

Thames Water and Southern Water were issued the highest fines (PA Wire)

Thames Water and Southern Water are set to repay almost £80 million to customers after the water regulator found they had missed targets on water supply interruptions, pollution and flooding.

A report from the water regulator Ofwat found that 11 companies would incur financial penalties totalling £150 million because they failed to meet so-called performance commitments - annual targets across the sector set in 2019 during the last price review - in the last year.

This money has to be repaid to customers, and will be taken off bills in the next financial year.

Of the companies fined, Thames Water and Southern Water were the worst performers.

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 £150 million to their customers.

“We expect companies to improve their performance every year; where they fail to do so, we will hold them to account.”

Water companies needed to win back the public’s trust, he added.

Thames Water and Southern Water both incurred the largest penalties for their handling of wastewater, at £37.2 million and £22.2 million respectively, which includes sewage treatment.

They were also fined for failures in their water treatment facilities and their consistency of residential retail supplies.

Water leakage remains a major problem for a number of water companies: in July, an Ofwat report found that although Southern had reduced leaks by 5%, and Thames Water by more than 10%, both companies were still wasting a huge amount of water.

Ofwat’s leakage figures for 2021 found the companies were losing more than 730 megalitres of water a day between them.

Warren Buckley, customer experience director at Thames Water, said: “Last year we saw a significant reduction in total complaints to the business following improvements to our customer service as well as a 39% reduction in supply interruptions in the last two years.

“We know we have more work to do to improve customer experiences across our services and we’re already accelerating the customer elements of our turnaround plan to improve our position.”

Southern Water did not respond to requests for comment.