Ofwat Warns Against Complacency

Water companies in England and Wales still have much work ahead of them – despite improving performance and pumping over £4.3 billion into maintaining existing assets and investing in new facilities in 2006-2007, according to Ofwat.

The water regulator has examined annual returns from the 22 water companies and found that investment was up nearly a quarter on the previous year. So far, after two years of the current five year price review, investment remains below the levels anticipated, mainly in respect of improvement schemes. But the majority of companies are investing what is needed in most areas to maintain the standard of service expected by customers.

Water companies in England and Wales still have much work ahead of them – despite improving performance and pumping over £4.3 billion into maintaining existing assets and investing in new facilities in 2006-2007, according to Ofwat.

The water regulator has examined annual returns from the 22 water companies and found that investment was up nearly a quarter on the previous year. So far, after two years of the current five year price review, investment remains below the levels anticipated, mainly in respect of improvement schemes. But the majority of companies are investing what is needed in most areas to maintain the standard of service expected by customers.

Ofwat has concerns about poor performance in key areas at Severn Trent Water, Southern Water and South East Water.

Ofwat Chief Executive Regina Finn said today: “While the water industry generally continues to meet its customers’ needs, there is certainly no cause for complacency. And there are some companies where we have several key concerns.”

Severn Trent Water performed poorly on investing to improve security of supply, meeting its leakage targets and the extent of supply interruption. Despite investing significantly, Southern Water has not delivered expected improvements to its performance in sewage treatment. And South East Water performed badly when dealing with customers.

Customers of all three companies experienced significant problems with billing systems, difficulties with telephone contact systems and delays in the resolution of complaints.

Ms Finn added: “Severn Trent Water and Southern Water must work harder to ensure their assets continue to be fit for purpose. Customers deserve high quality standards of service and we have put pressure on companies to improve in this area.

“Southern Water and Severn Trent Water have provided us with action plans of how they will improve customer services and South East Water is also taking steps to remedy its failings. We will be monitoring the progress of all companies very closely and making sure they do deliver for their customers.”

The performance overview released today looks at performance up to March 2007. Since then water customers have suffered as a result of flooding following exceptional weather. Floods overwhelmed flood defences, storm drainage and the sewerage network alike. Crucial pieces of infrastructure were also damaged – particularly the Mythe water treatment works, leaving hundreds of thousands of people without water.

Ms Finn said: “Whilst the immediate recovery operation has been the top priority for everyone concerned, we all must learn lessons from what has happened and think about how to prepare for the future.

“Climate change may mean that such storms happen more often and cause more floods. This makes long-term planning essential and we must look hard at how to protect all crucial infrastructure – not just that of the water industry.

“Before the floods struck, Ofwat had already asked water companies to prepare 25-year Strategic Direction Statements. These will shape our next Price Review in 2009 and give an ideal platform for the water industry to plan for challenges such as climate change.”

Leave a comment

Your email address will not be published.


*