Water firms failing to meet agreed investment in networks – Ofwat

Water firms are failing to invest as much as they promised to fix their networks, including improving sewage treatment and reducing spills into the environment, the regulator has warned.

Ofwat said between 2020 and 2022, 14 companies underspent their budget on improving their water network and eight companies underspent their budget for improving their wastewater network.

Affinity Water and Northumbrian Water spent just 47% and 48% of their water enhancement allowance respectively, and Yorkshire Water and South West Water spent just 20% and 39% of their wastewater enhancement allowance respectively.

The main areas of underspending across both categories included drought resilience, improvements to sewage treatment works, improvements to storm tank capacity and reducing spill frequency.

Ofwat sets allowances for how much companies can charge households to then invest over the price control period, to maintain and improve its water network.

The watchdog’s chief executive David Black said: “We expect companies to deliver the service improvements they were funded to deliver. No ifs, no buts.

“The lack of investment from companies we’re seeing at the moment is extremely disappointing, especially in light of the poor performance for customers and the environment.

“Failure to invest or delays to investments means that vital improvements are not being made or are late. I am expecting these companies to get a grip on their investment programme and make up for the shortfalls to deliver the associated improvements in service.”

A Water UK spokesman said: “Water companies are committed to playing a full part in improving our water environment – including improvements agreed as part of their five-year investment plans that last up to 2025. In fact, a number have volunteered to go further than those plans, committing to beat Government targets in a number of areas.

“Today’s data represents a short snapshot that only covers two of the five years in the current regulatory period – the first of which was severely disrupted by Covid lockdowns; as with other industries, this caused companies to reprofile some of their construction programmes. In addition, the data covers only about a fifth of the areas companies are investing in, leading to a partial and selective picture of their full activity.

“What matters is that the industry delivers all of the environmental outcomes it has committed to by 2025 – and companies know that they will be held fully to account for that by their independent regulators.”

Last month campaign group Surfers Against Sewage (SAS) claimed that water companies had released raw sewage into UK rivers and seas almost 150 times during dry weather – despite being told to do so only when there is heavy rainfall.

So-called “dry spills” occurred at least 146 times “at a conservative estimate” when there was no rain recorded between October last year and September, SAS said.

The spills are intended to occur only during times of exceptional rainfall to help the sewage network cope, with releases at other times a potential breach of water firms’ permits.

Over the same period, SAS issued 9,216 sewage pollution alerts via its Safer Seas &; Rivers Service, which covers more than 450 beach and river spots across the UK and is designed to help the public make informed decisions about where and when they swim, surf or paddle.

A quarter (2,053) were during the 2022 bathing season and 39% of sickness cases reported to SAS correlated with the alerts, the group said.

Emma Clancy, chief executive of the Consumer Council for Water (CCW), said: “Customers will feel like they’ve been short-changed if water companies fail to deliver on their promises and that risks eroding trust in the industry.

“Households have a right to expect that their money is being spent wisely and customers have made clear to us they see a resilient water supply, tackling leakage and protecting the environment as priorities.

“Companies need to up the pace and make sure they deliver the investment they’ve promised before seeking any further bill increases in the future.”

Ofwat’s Water Company Performance report will be published in full on December 8.