Quarter of water companies neglecting leakage duties, says Ofwat

More than a quarter of all water companies in England and Wales failed to do enough to manage leakage, regulator Ofwat said today. Although companies continued to provide a good service to most consumers, six out of 21 companies failed to meet their leakage targets, according to the Water Services Regulation Authority's annual report. The worst offender was Yorkshire Water, which lost on average 295 million litres a day in the 2009-10 period, Ofwat said. Other companies which missed their targets were Cambridge, Dee Valley, Northumbrian, Southern and Veolia Central. The report said the failures occurred in the context of the coldest winter for more than 30 years, when snow-covered ground could make identifying leaks more difficult. Companies reported high numbers of burst pipes because of ground movement caused by freezes and thaws. Ofwat chief executive Regina Finn said failing companies would be forced to improve. She said: "We take any leakage failures seriously. Most companies stepped up to the challenge of tackling leakage during a particularly harsh winter. Those who haven't, we have put on notice. "If companies continue to under-perform, we will take action. In the last five years, companies have had to pay out more than £500m from their own pockets following under-performance. We've made sure that the bulk of this money has been spent on giving something back to customers, either through reduced bills or investment in improving services." Ofwat has previously taken action against companies following serious and consistent under-performance on leakage, including Thames Water (in 2006) and Severn Trent (in 2007), who committed a combined total of an extra £195m of their own money to address failures. Ofwat said both companies have significantly improved their leakage performance. Ofwat is still in the process of investigating Yorkshire Water's leakage failure, and how the company reports its leakage. The report also found complaints had fallen to their lowest levels for four years and drinking water quality was still among the best in Europe. It also found all companies achieved their targets to make sure supplies met demand from customers. Consumer Council for Water spokesman Nick Ellins said: "Consumers view leakage as a waste and want to see water companies managing their resources effectively. Many will be disappointed to hear that some water companies missed their leakage targets, even by a small amount, particularly if customers themselves are being asked to value water and use it wisely. "It is important for customers to remember when it comes to leaks, ageing pipes, roadwork, cold winters, tree roots and even corrosive soil in some areas mean that it will never be possible for water companies to reduce leakage to zero, and to replace and fix all of the older pipes at once would have a huge impact on customers' water bills. "But we believe customers should have a bigger role in deciding what work is to be carried out by their water companies. Tightening leakage targets could mean that customers pay a little bit more, but they should be given the opportunity to make that choice for themselves." On 26 November, Ofwat will publish its final report on price limits for 2010-2015, setting out price limits for each company for each year of the five-year period as well as expected changes in bills for each year.