Thames Water among 14 firms to fail watchdog’s business plan review
Britain’s biggest water company, Thames Water, is among four firms taken to task by regulator Ofwat over their business plans, with just three companies given the green light.
The water watchdog said Thames Water, Southern Water, Affinity Water and Hafren Dyfrdwy will have to “substantially rework and resubmit” their five-year plans and will now face increased regulatory scrutiny.
Another 10 water suppliers are deemed “slow track” firms and will also have to rework their proposals for the 2020-25 period.
But Ofwat said Severn Trent, South West Water and United Utilities had already passed the review after delivering “such high-quality plans”.
It said the three companies – marked as “fast track” firms – set out how they will cut bills by up to £70 in real terms while “significantly improving support for vulnerable customers and deliver real change in the areas that matter most to customers, like cutting leakage”.
Rachel Fletcher, Ofwat chief executive, said water firms have in general “listened to the customers they serve” in this latest review.
The regulator stressed that this review “pushed them to go further than ever before”.
Ms Fletcher added: “Three companies have already stepped up to the mark with high-quality plans and stretching commitments to customers for the next five years.
“The rest of the sector now needs to meet this high standard so that customers across the country get better and more efficient services.”
Ofwat also said the raft of “slow track” firms had more work to do on their plans.
These include Anglian, Bristol, Wessex, SES and Northumbrian.
These companies and the four identified for “significant scrutiny” now have until April 1 to submit revised business plans.
Steve Robertson, chief executive of Thames Water, said the group was “disappointed” with Ofwat’s announcement.
He said: “We are seeking Ofwat’s permission to invest more in areas where we know it is needed. Instead, it appears that we are being asked to reduce our current levels of spending.
“We are concerned that this will make it harder to meet the needs and expectations of our customers, amid the challenges of population growth and climate change.”
Ofwat said across the board, the 17 water companies are proposing significant improvements for customers in the 2020-25 business plans, including help for up to 1.5 million customers struggling to pay their water bills, a 15% reduction in leakage, up to 80% reduction in pollution incidents and at least £10 billion-worth of extra investment.
Among the so-called fast track firms that have overcome the first hurdle, Severn Trent Water pledged to cut average water bills by £18, United Utilities by £43 and South West Water by £73.