Water companies in England and Wales have been instructed to refund £114m to customers in the form of reduced bills next year due to slow progress on leakage and sewage spills. The regulator, Ofwat, stated in its yearly performance report that the majority of water and wastewater companies are failing to achieve the targets set for 2020-2025 to deliver improved outcomes for customers and the environment. The companies are assessed against metrics including pollution incidents, customer service, and leakage. This year, no company achieved the “leading” ranking, 10 were deemed “average,” and seven were labeled as “lagging.” Criticism has been directed at the government and Ofwat for not taking action sooner to address the crisis in the water industry. Many argue that the sector’s operating model is flawed and has failed both customers and workers. Water companies have made some progress since 2020, particularly in reducing leakage and internal sewer flooding, but the rate of improvement has been too slow. Less than half of the companies achieved their performance target for reducing pollution incidents, and most reported an increase in annual leakage. Customer satisfaction has also declined overall. Concerns have been raised about the limited detail provided by companies regarding efforts to improve river water quality and reduce storm overflows. Despite the poor performance, these companies have paid out significant dividends to shareholders and accumulated substantial debt. Some water company bosses have given up their bonuses in response to public anger over sewage dumping. Ofwat is investigating all 11 water and wastewater companies, with active enforcement cases for six regarding potential failures in sewage discharges, and two cases related to leakage reporting accuracy and per capita consumption performance. While the £114m refund is a welcome development for customers, most bills are still expected to rise due to high inflation. Companies are required to submit their five-year business plans to Ofwat next week, with some likely to request significant bill increases to fund infrastructure investments.
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