Failing water company bosses will be hauled in front of the environment secretary to address underperformance, Therese Coffey has revealed.
Following Ofwat’s annual performance review, the head of the Department of environment, food and rural affairs (Defra) confirmed that she will call the heads of the seven underperforming companies to a meeting.
Coffey, who met just once with water companies in her first six months in office, said the overall performance of the sector is “extremely disappointing”.
Coffey said: “We have written to the CEOs of every water company in the lowest category of today’s report and my ministerial team and I will meet them in person to scrutinise their improvement plans.”
The seven companies rated as “lagging” by Ofwat include Anglian Water, Welsh Water, Southern Water, Thames Water, Yorkshire Water, Bristol Water and South East Water.
As Utility Week previously revealed, the only meeting in Coffey’s ministerial diaries from October 2022 to March 2023 recorded with water company representatives was to discuss company performance from 2022’s performance report by Ofwat.
In December last year, Coffey and Rebecca Pow attended a roundtable with bosses at Northumbrian, South West, Southern, Thames and Yorkshire to discuss their performance in Ofwat’s water company performance report.
Coffey was slated by opposition politicians who described the lack of interactions with the sector Defra oversees as “sad” and “hardly a surprise”.
Although during 2022-23, Coffey acknowledged that “there is good work ongoing in some companies”, she said it was not enough.
“The fact that not a single water company is classified as ‘leading’ is unacceptable,” she said.
The annual results from Ofwat indicate the sector will need to accelerate progress to meet their performance commitments by the end of this asset management period by 2025. Ofwat calculated companies must return £236 million to billpayers for underperformance. However, five companies earned a total of £122 million for hitting their targets. See Utility Week’s full story here.
A spokesperson for Thames, which was bottom of the rankings for performance, 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.
“Our turnaround is already delivering performance improvements. Our complaints fell by 28%, the second consecutive significant year-on-year reduction and we have seen improvements in several key performance commitments including a reduction in sewage discharges, internal sewer flooding, and sewer blockages. We’re making progress and we’ll continue to engage and work with Ofwat as we implement our plan. We’re determined to do better for our customers and the environment.”
Severn Trent, which was the top performing company – netting £88 million in outperformance payments – said: “We continue to make great progress on the measures that matter most to our customers, such as driving down leakage, our best ever performance on low pressure, our industry-leading action plan to improve rivers as well as being recognised as sector leading for reducing pollutions.
“Last year, and for the fourth consecutive year, we once again received the highest 4* status for our environmental performance from the Environment Agency. Although, despite being one of the few companies rewarded for outperforming against measures, we will work even harder to meet our customer’s expectations, and we are confident that though our multimillion pounds investment we’ll deliver even more for our communities and the environment this year.”
Southern Water, which remained at the low end of the ratings with Thames, said its turnaround was in hand. A spokesperson said: “Under new leadership since last year, we’ve been clear we need to do better, and in April this year, we set out an ambitious Turnaround Plan, supported by significant new investment from shareholders of £1.6 billion since 2021. This is allowing us to spend a record £3 billion on our network between 2020 and 2025 – the equivalent of £1,500 per household.”
Meanwhile Bristol Water has slid from a leader to a lagging behind company during the year. Its parent, Pennon Group, said of its and South West’s performance: “We continue to deliver significant improvements in our performance, but we know there is more to do. Today’s report is just one part of a much larger picture for our group, however it does reflect some of the improvements and progress we are making. We are also injecting large investments into our Bristol region to make sure we continue to have a water network to be proud of for future generations.”