Water is something we all use in our homes whether we own or rent, if you're working out your water bill for this month you should factor in the latest announcement from Ofwat, the water industry regulator.
When Ofwat, the water industry regulator, published its yearly report yesterday evaluating the performance of the 17 largest water and wastewater companies across England and Wales, the results will affect the bills of many households. The regulating body ordered customer water bill rebates for several of the companies amounting to £114 million altogether.
Each company was judged based on its targets for 2022/23 and stretching targets set for them for 2020-2025 to perform better for both its customers and the environment. At the end of the evaluation, all companies were given a rating of ‘leading’, ‘average’ and ‘lagging’ based on factors like customer service, leakage and pollution incidents.
The rather grim reality is that none was awarded a ‘leading’ status this year and seven of them were branded as ‘lagging’, which is why they are facing water bill rebates. However, the good news is that many households will now be eligible for a water bill discount as part of the rebate.
Here's how to find out if you are eligible to get your money back.
Ofwat orders water bill rebate
The disappointing companies that are faced with these charges for underperforming were announced to be Thames Water, Southern Water, Dŵr Cymru, Anglian Water, Yorkshire Water, South West Water, Affinity Water, South East Water, South East Water and SES Water.
Thames Water is the worst offender as it turns out the company that serves Greater London, Luton, the Thames Valley, Surrey, Gloucestershire, as well as parts of Wiltshire and Kent is ordered to pay back its customers £101 million in bill reductions next year.
A spokesperson for Thames Water said, ‘Our customers expect a great service from us every time, and we’re sorry when we fail to deliver at the first opportunity. In 2022-2023, we met 55% of our annual performance commitments. While it is our job to deliver our services whatever the weather, our performance last year was severely affected by the summer drought and December freeze/thaw event.’
The good news is that you as the customer don’t have to do anything at all as the reductions to your bill will be applied automatically and to ALL customers served by the above listed companies.
As explained both by Ofwat and Thames Water (and this will be the same whatever water company you’re serviced by) ‘the application of these operational rewards and penalties is part of a ‘business as usual’ annual process whereby the allowed revenues that Ofwat permit water companies to recover from customers are adjusted up or down accordingly.’
This is going to be applied to your annual water bill, which will be announced in February 2024 and actioned in April 2024. ‘Customer bills in 2024-25 will be lower than they otherwise would have been if the penalties had not been applied,’ explains Thames Water spokesperson.
For us as billpayers, this is, of course, great news. But in reality, it’s not the best way to save money on water bills. It’s more of a silver lining as it shows how poorly the industry serves us year-round, as outlined by Ofwat’s CEO, David Black.
‘The targets we set for companies were designed to be stretching – to drive improvements for customers and the environment. However, our latest report shows they are falling short, leading to £114m being returned to customers through bill reductions. While that may be welcome to billpayers, it is very disappointing news for all who want to see the sector do better. It is not going to be easy for companies to regain public trust, but they have to start with better service for customers and the environment.’
On the other hand, a spokesperson for Water UK, the trade association for the water industry funded by its member water and wastewater companies across the country, points to the positives shown in the report.
‘Today’s figures show that, in many areas, there have been significant improvements since the start of the decade. There were fewer incidents of serious pollution and less leakage from our ageing water infrastructure. However, companies recognise there is still much more to do to meet the regulator’s ever-tightening targets. Ensuring the security of our water supply in the future while protecting the environment will take significant investment. That’s why water companies in England and Wales are proposing record levels of investment over the rest of this decade, with detailed plans set to be published next week.’
But it’s not all good news for everyone as some customers will end up having to pay more for their water bills come next year due to some companies performing well. This includes Severn Trent Water, which is allowed to charge extra £88 million in customer bills, and United Utilities, which is given the go-ahead to charge extra £25 million.
We will keep following the situation as the story unfolds in the coming weeks.