Water firms repeatedly warned by watchdog over supply risks, documents reveal
Ofwat raised concerns with the companies’ performances in key areas including leakages, chemical pollution, unsustainable abstraction from the environment and demand management.
Nearly a dozen water companies have been repeatedly warned by the industry watchdog about risks to supplies, documents reveal.
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Ofwat and the Environment Agency and the Environment Department (Defra) warned 11 firms over the risk of supplies last year.
The warnings came in the annual review of their water resources management plans, covering the period from 2020 to 2045.
Thames Water, South East Water, Anglian Water, Affinity Water, Southern Water, South West Water were all notified.
Cambridge Water, Portsmouth Water, Essex and Suffolk Water, Albion Water, and South Staffordshire Water were also issued warnings.
The regulator raised concerns with the companies’ performances in areas including leakages, chemical pollution, unsustainable abstraction from the environment and demand management.
Thames Water was told falling behind on demand management would pose a risk to the security of supply for customers in a dry year in the short term.
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The company was also told it risked missing its long term ambitions to reduce demand.
Southern Water was told it had persistently underperformed on its water resources management plan delivery, including leakage reduction, over the last six years.
“This has put both customer supply security and the environment at unacceptable risk.
“This requires immediate additional action to get customer demand down,” the letter read.
In a letter to South West Water, regulators warned its management of high demand for water in the area “contributed to operational challenges and your ability to meet customer demand during warm, dry periods.”
It comes days after the government announced plans for a major overhaul of the water industry.
New measures would include inspections without prior warning, regular MOT-style checks and compulsory water efficiency labels on appliances.
Environment Secretary Emma Reynolds said there would be "nowhere to hide" for badly performing water firms.
“Water companies will have nowhere to hide from poor performance, customers will get the service they deserve, and investors will see a system built for the future.
“This builds on the tough action we’ve already delivered, from record investment to banning unfair bonuses,” Ms Reynolds said.
The hope is that risks such as South East Water’s pipes bursting in cold weather, which recently left thousands of homes without supply, are identified in advance.
While it blamed the issues on cold weather, documents from November last year show South East Water had “shown significant resilience concerns during dry weather with supplies being restricted due to high demand”.
To Anglian Water, and Essex and Suffolk Water, regulators shared their concerns that supply limits in some of their areas could hinder growth and sustainable development as potential new users are turned down.
James Wallace, chief executive of River Action, said: “This is yet more evidence that the UK is sleepwalking towards running out of water. “It sounds absurd in a rainy country, but decades of under-investment and a profit-first model have left our water system – our lifeblood – dangerously fragile.
“Three million litres of drinking water are lost every day through leaking pipes and not a single new major reservoir has been built since privatisation in the late 1980s.
“The public has paid through rising bills – now water companies must invest to prevent taps running dry and serious damage to the economy, food security, industry and our health.”
An Ofwat spokesperson said: “While there has been progress, we have reminded those companies that remain off track that they will be held to account for any non-delivery of more resilient water supplies.
“We do not hesitate to act where they fail to do so, such as our ongoing enforcement investigations against South East Water on supply issues and customer service.
“We allocated £2 billion to companies to accelerate work on 30 major supply projects in our 2024 Price Review – itself an unprecedented £104 billion package to help companies deliver better outcomes for customers and the environment.”
The Press Association has contacted the Environment Department (Defra), industry body Water UK and the water companies for comment.