Ahead of tomorrow’s deadline for water companies to appeal to the Competition and Markets Authority about the outcome of the PR19 price review, Rachel Fletcher, Chief Executive of Ofwat, said:
“This price review lays down a major challenge for the sector to transform: introducing a demanding set of new performance targets backed by investment for the future, including £13bn dedicated for the environment and future generations. This is the greenest price review ever.
“Companies must become more efficient, and step up to deliver better services, lower bills and secure long-term resilience.
“We have been clear that shareholders’ rewards will only be earned through a new standard of operational excellence. Some investors have accepted this scale of ambition and change, but others need to face up to the new reality.
“We are ready to fully engage with the CMA, setting out our analysis and why we are confident this is the right settlement for customers, the environment, and companies.”
PR19 consisted of a spending package of £51bn for the next five years. A quarter of this, around £13bn (or £6m every single day for five years), will be investment dedicated to providing resilient services and a better environment in the face of a growing population and climate change.
PR19 delivers an average reduction in bills of about £50 before inflation, secured by demanding greater efficiency, passing through lower financing costs and promoting more innovation.
PR19 sets new levels of service so water companies transform their performance over the next five years. These include:
- Cutting leakage by 16% – saving enough water to meet the needs of everyone in Birmingham, Bristol, Cardiff, Leeds, Liverpool and Sheffield
- Identifying and helping an additional two million customers who need extra support
- Investing over £1 billion to protect communities at risk of flooding
- Reducing pollution into rivers and streams by almost a third
- Preparing for drier weather by providing £450 million to explore new water resources such as reservoirs or moving water from where there is lots to places with less.