South West Water has been ordered to repay £17.4 million to its customers for poor performance after the company recorded the highest proportions of both sewer collapses and serious pollution incidents among England and Wales water companies during 2023-24.
Industry regulator Ofwat’s annual performance report found that South West Water reported an 80% year on year increase in serious pollution incidents with 111 such incidents per 10,000km of sewer.
The company’s rate was close to double that of the next poorest performing water authority, Southern Water, and five times higher than Ofwat targets.
South West Water also recorded 13.7 sewer collapses per 1,000km of sewer, close to double the industry average.
It nevertheless reported a fall in the volume of water lost from its distribution system, and was judged to have have met or performed better than the target in this area.
However Ofwat launched an investigation into its leakage performance reporting last May and says the outcome may result in changes to the company’s figures on this measure.
Serious pollution incidents per 10,000km of sewer 2023-24. Source: Ofwat.
Ofwat said 2023-24 industry-wide performance was “disappointing” and ordered firms to pay back a total of £157.6 million in the form of reduced bills for 2025-26, the fourth year in a row for which customers will be refunded.
It said that despite water company promises to reduce pollution incidents by 30% these had fallen by just 2% to date.
South West Water’s £17.4 million underperformance penalty, up from £9.2 million last year, is lower than the penalties imposed on seven of the other sixteen England and Wales companies. Thames Water has been ordered to refund £56.8 million to its customers.
Ofwat set water company performance targets for each of the five years to 2025 to “deliver better outcomes, for both customers and the environment”, and imposes penalties when they fall short. It has issued penalties of more than £430 million since 2020.
Ofwat underperformance penalties 2023-24. Source: Ofwat.
Water company performance is graded against a range of twelve targets with Ofwat assigning an overall rating of “leading”, “average” or “lagging behind” to each company.
South West Water was judged “average” for the second year in a row in 2023-24 after previously “lagging behind”.
Following its 2021-22 performance, Ofwat required it to produce service commitment plans setting out how it would deliver improvements. These were published in November last year.
Ofwat’s 2023-24 report said that companies were falling further behind on key targets for pollution and internal sewer flooding and that, for the second year running, no company achieved the top performance rating.
Ofwat CEO David Black said: “This year’s performance report is stark evidence that money alone will not bring the sustained improvements that customers rightly expect.
“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.”
He added that customer satisfaction had continued to fall and was now at its lowest level since the measure was introduced in 2020-21.
South West Water remains among the worst performers in the industry on this metric, and was one of three companies which saw the largest percentage decline in satisfaction scores last year.
