Water companies told to hand back £150m to customers over pollution and sewer problems

3 October 2022, 11:35

Households can expect almost £150 million to be taken off their water bills after 11 water suppliers have been hit by fines, regulator Ofwat has announced.

Ofwat said utility companies have been fined for missing set targets in areas such as water supply interruptions, pollution incidents and internal sewer flooding.

Thames Water and Southern Water performed the worst overall and will be asked to return almost £80 million to customers, according to Ofwat.

But water companies which exceeded targets will be able to recover more money from customers, meaning some households could see their water bills rise.

Severn Trent Water, which supplies water to over eight million people in the UK, were among the top performers in the regulator's review and will be able to increase customer payments by £63 million in the year ahead.

However, Ofwat noted that all the water companies will be allowed to increase their charges in line with inflation, using the consumer prices index including owner occupiers' housing costs (CPIH) - which hit 8.6% in the 12 months to August.

This means some reductions in customers bills could be offset by inflation-linked price rises.

David Black, the chief executive of Ofwat for England and Wales, 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.

"The poorest performers, Southern Water and Thames Water, will be asked to return almost £80 million to 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."

Ofwat's review comes at a time of greater scrutiny of water companies during a period of drought, with some areas of the country facing hosepipe bans as result of summer heatwaves.

In August, Mr Black said targets for areas such as water leaks were "challenging but achievable", revealing he did have concerns about the performance of some companies.

The yearly targets were set at Ofwat's last price review in 2019 and will be in place until the next review in 2024, which will set the price controls for 2025 to 2030.

Customers can expect to see their water bills reduced in 2023 until 2024.