PN 04/19 2019 price review: three water companies over the line at first hurdle with high quality plans


Water regulator Ofwat has today given its initial assessment of water companies’ business plans for 2020-25.

Three water companies – Severn Trent, South West Water and United Utilities – delivered such high-quality plans that they have already been given the green light by Ofwat.

The plans from those three companies 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.

In the coming months, the remaining water companies will have to strengthen their plans so they too deliver for customers. Four companies – Affinity Water, Hafren Dyfrdwy, Thames Water and Southern Water – have the most work to do in order to meet the tough challenges Ofwat has laid down for the sector.

Across the board, water companies are proposing significant improvements for customers in the period 2020-25, including:

  • Help for up to 1.5 million customers struggling to pay their water bills;
  • A 15% reduction in leakage – the equivalent of more than 170 billion litres of water per year, which would save enough water for three months’ worth of daily showers for everyone in England and Wales;
  • Cutting greenhouse gas emissions by 45%, the equivalent of taking 360,000 cars off the road;
  • Up to 80% reduction in pollution incidents; and,
  • At least £10bn worth of extra investment to meet more stringent environmental standards, connect new homes and meet increased demand over the coming years.

Ofwat Chief Executive, Rachel Fletcher said:

“We have challenged all water companies to deliver more for less for customers over the next five years.

They’ve listened to the customers they serve. We’re seeing an increased focus on the things closest to people’s hearts such as keeping bills affordable, cutting leakage, protecting the environment and helping those most in need. 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”.

Notes to editors

 To view Ofwat’s assessment of water companies’ business plans in full, click here

 Future milestones for 2019 price review:

  • 1 April 2019: companies categorised as either significant scrutiny or slow track must submit revisions to their business plans addressing the shortcomings Ofwat has identified.
  • 11 April 2019: publication of draft determinations for companies with exceptional & fast track plans.
  • 18 July 2019: Ofwat will publish draft determinations for companies categorised as either slow track or significant scrutiny.
  • 11 December 2019: Ofwat will publish final determinations for all companies.

The total number of instances of support from social tariffs, WaterSure, WaterSure+ and hardship funds for customers struggling to pay will reach 1.5 million by 2024-25. Some customers may receive more than one intervention. Customers may also receive support with bills from other schemes.

The three fast track companies propose the following real term (before inflation) bill reductions: Severn Trent Water £18, United Utilities £43, South West Water £73. These are the differences between projected 2019-20 and 2024-25 bills in 2017-18 prices .