Drought and hosepipe bans have generated a lot of concern about the amount of water that is lost to leaks. As the pressures around population growth and climate change increase, tackling leakage is one of the key ways that water companies can make sure the water supply in the future is secure.
Currently around a fifth of water running through pipes is lost to leakage, and Ofwat (as the economic regulator) expects water companies in England and Wales to significantly improve on this. We have seen leakage reductions in recent years after Ofwat intervened and set water companies stretching targets, but more needs to be done.
This article explores some of the key questions around leakage:
- What is leakage? Why do water companies lose water to leaks? Is it possible to have no water lost to leaks?
- How do you measure water that is lost to leaks?
- How does the UK compare to the rest of Europe on leakage?
- How do England and Wales compare to Scotland and Northern Ireland on leakage?
- Has leakage in England and Wales improved?
- Overall, how well are water companies in England and Wales doing on leakage?
What is leakage? Why is water lost to leaks? Is it possible to have no water lost to leaks?
Leakage is the water that companies cannot account for; so water that has entered their system but has not been delivered to homes, businesses or used in their operations. Water companies’ leakage targets and figures are based on the pipes that they are responsible for maintaining, which is all the way up to the supply pipes that put water into a property.
Leakage is driven by a number of factors such as the condition of pipes and companies’ operational strategies (for example, how they manage water pressure).
Some leaks in water pipes are inevitable, as pipes can wear out or be damaged when they naturally expand and contract during normal operation and this can worsen during very dry or freezing weather. We expect companies to find and repair leaks and to replace pipes that wear out to bring down leakage. Achieving a leakage level of zero is difficult because there are likely to be small leaks that are hard to detect or may be very expensive to fix. However, we are seeing progress; over 40% of pipes have been replaced since privatisation, and the Ofwat innovation fund is funding transformative initiatives to look at new ways of identifying and tackling leakage.
How do you measure water that is lost to leaks?
Leakage can’t be measured; the only way to do that would be to collect every drop that is leaked. It has to be calculated, by adding up all the water put into the supply network and subtracting all the water that has been delivered. Water meters can help provide an accurate record of water used, but for properties that don’t have meters, the amount of water used is calculated using sample properties. Some water in the system is also used for activities such as firefighting, or keeping the mains clean, but the remaining water that is unaccounted for is classed as leakage.
Every water company has a leakage target that they are set each year – if a company doesn’t meet its leakage target, it has to return money to customers. At the latest price review in 2019 (PR19) we updated how leakage performance was reported to improve consistency between water companies and required all companies to report a three-year average of leakage. Prior to PR19 companies were able to report performance in different terms; for example, some used annual figures and others used three-year averages or averages over a longer period. The PR19 update to leakage reporting made comparisons between companies easier, any trends more visible, and also means that reported figures are less skewed by exceptional events.
How does the UK compare to the rest of Europe?
Making international comparisons on leakage is not easy as the methodology used to calculate leakage varies from country to country. Many countries use the term ‘non-revenue water’ which also includes unbilled consumption such as illegal connections, errors in customer billing and unaccounted for water which may not actually be leakage. In England and Wales all those losses are not reported under the term leakage when measuring water company performance.
This means that we cannot directly compare the performance of England and Wales to other countries as we do not use the same definition of non-revenue water as a measure of leakage. However, we do have data for non-revenue water for the UK as a whole (including Scotland and Northern Ireland), which means there are some broad comparisons that can be made (see Figure 1).
The most recent data shows the UK performed better than many other European countries in this area. The UK leaks less water than countries such as Ireland, Italy, Norway, or Portugal but performs worse than Belgium, Sweden, Switzerland, France, Finland, Denmark, or the Netherlands (Figure 1). And, although until more recently we have not been able to make country comparisons, we know that leakage in the England and Wales has come down by around 11% since 2017-18 and it is now at its lowest ever level.
Figure 1. Leakage – measured as % of non-revenue water. European countries. (2018)
Source: Eur Eau. Europe’s Water in Figures – An overview of the European drinking water and waste water sectors
How does England and Wales compare to Scotland and Northern Ireland?
Although we can only make comparisons to other European countries using the UK as a whole (due to how these cross-country figures are collected and reported), we can also look at leakage levels across the UK. Water companies in England and Wales overall leak less water than either Scotland or Northern Ireland.
Leakage measured in litres per person per day is significantly lower in England and Wales than in Scotland and Northern Ireland (Figure 2). In 2020-21 England and Wales leaked 51 litres of water per person per day while in Scotland and Northern Ireland this figure was above 80 litres of water.
Figure 2. Leakage – measured in litres per person per day. UK countries
Source: Ofwat, using data from Ofwat, Scottish Water APRs, Northern Ireland Water APRs and ONS.
Has leakage in England and Wales improved?
Overall, the water sector in England and Wales has been improving – leakage is now at its lowest level ever – however more needs to be done. There was a sharp reduction in the years immediately after privatisation, followed by two decades in which levels of leakage remained broadly flat. More recently, after our interventions and challenge to the sector in 2017, we have again started to see further improvements, with some companies making significant reductions.
We have made sure that the targets we set companies in the latest price review are stretching, and despite initial reservations that these would be hard to achieve, most water companies are now hitting their targets. We have challenged the sector to reduce leakage by at least 16% in the 5 year period up to 2025, and water companies have also committed to reducing leakage by 50% from a 2017-18 baseline by 2050.
Figure 3. Leakage over time in England and Wales – measured in ML/d
How well are water companies in England and Wales doing on leakage?
Overall, there are three key takeaways on leakage in England and Wales:
- Leakage in England and Wales is at its lowest ever level since privatisation, is lower than in many other European countries, and is significantly lower than in either Scotland or Northern Ireland.
- However, the public rightly expects water companies to do much more to reduce leakage, particularly in the context of ongoing climate change, and Ofwat will continue to push companies to go further to reduce their leakage.
- Looking ahead, Ofwat is proposing to continue setting yearly leakage targets for each water company for the next five-year period (2025-2029), making sure that companies are performing well for both customers and the environment.
We have also published a leakage dataset spreadsheet with leakage reported consistently with the methodology established for the PR19 performance commitment covering the period 2017-22, and leakage reported based on companies historical reporting methodologies 1992-2020.
 While most data are from 2018, some countries’ latest data is from 2017, and for a few others, data is from 2015.
 Figure 3 shows both a) leakage reported consistently with the methodology established for the PR19 performance commitment covering the period 2017-22 b) leakage reported based on companies historical reporting methodologies 1992-2020. We revised the leakage reporting definition when setting leakage reduction targets for the 2020-25 period. These changes were made to improve consistency of reporting between companies. There is a period of overlap between 2017-2020.