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08
Oct 2024
Yorkshire Water ordered to return £36 million to customers
Yorkshire Water has been ordered to pay back £36 million to customers through lower bills after missing key regulator targets.
This morning, Ofwat, the water industry regulator, published its water company performance report which found that companies had shown “disappointing results”.
The report measures performance in key areas such as pollution, supply interruption and water leaks.
Ofwat found that despite promises to reduce pollution levels by 30% between 2020 and 2025, an increase in incidents in 2023 means there has now only been a 2% reduction to date across the water companies.
On leakage, while progress has been made, companies have only achieved a reduction of 6% on an annual basis to date, against a target of 16% by 2025.
Ofwat assesses the 17 largest water and wastewater companies in England and Wales as part of the report. None achieved the highest rating of "leading" after the review.
As a result of the assessment, Yorkshire Water was upgraded from "lagging behind" to “average” which means it has improved in some areas, such as leakage and mains repairs, but requires “sustained improvement”.
The performance of water companies as assessed by Ofwat. Picture: Ofwat.
Ofwat found that the company had performed poorly in areas such as supply interruptions, pollution and drinking water quality. Internal sewer flooding was also rated as poor.
The move means the company will be required to pay customers back £36 million through lower bills next year — the third highest of all the water companies.
Only Anglian Water (£38m) and Thames Valley (£56.8m) have been ordered to pay back more.
But David Black, chief executive of Ofwat, said that money alone would not bring improvements at water companies.
He said:
This year’s performance report is stark evidence that money alone will not bring the sustained improvements that customers rightly expect.
It is clear that companies need to change and that has to start with addressing issues of culture and leadership. Too often we hear that weather, third parties or external factors are blamed for shortcomings.
Companies must implement actions now to improve performance, be more dynamic, agile and on the front foot of issues. And not wait until the government or regulators tell them to act. As we look towards the next price control, the challenge for water companies is to match the investment with the changes in company culture and performance that are essential to deliver lasting change.
In response to the report, a Yorkshire Water spokesperson said:
Last year, we made some great improvements in reducing leakage, which we know is a key area that our customers care about. We're pleased this work has been recognised and our performance rating has been improved by Ofwat.
We also made progress versus the rest of the industry in how our customers perceived us and we are continuing with this improvement this year. We also delivered a significant increase in registering customers who may need extra help from us. We also made substantial investment in our wastewater network and continue to do so.
Unfortunately, in other areas we did not meet some of our commitments and as a result, our customers will receive an adjustment to our bills from April next year. Despite this, we remain committed to doing right by our customers and delivering more of what they expect. We are in the process of investing almost £800m in our infrastructure across the region this year, which includes £180m to reduce storm overflow use and improve water quality in our region's rivers - another key area our customers really care about.
Making long-term, lasting change takes time, but we are committed to doing more of what our customers expect and will publish a service commitment plan in November. We have also submitted plans to Ofwat outlining our largest ever environment investment between 2025 and 2030 and we look forward to their decision and delivering in the next five years.
The rebate for customers comes two months after Ofwat fined Yorkshire Water £47 million after an investigation into the country’s water companies.
Yorkshire Water was one of three that failed to manage their wastewater treatment works adequately.
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