Water firm performance penalties mean many households will see bills cut

Millions of households will see reductions to their water bills because their supplier failed to meet performance targets.

The industry regulator said on Tuesday that it had finalised the amounts that underperforming companies must return to customers – with a net total of £70m due to be handed back through bills next year and in 2025.

The sum is far lower than the £114m figure it had provisionally set in September.

Ofwat judges the performance of water companies in England and Wales annually on the basis of targets they are set over a five-year term in areas such as supply disruption, leaks and pollution.

The effective fines for poor performance are not due from all suppliers because five firms, including major suppliers Severn Trent Water and United Utilities, met their goals.

They will be allowed to add £89m and £25m to the bills of their respective customer base.

Households under Wessex Water, South Staffs Water and Portsmouth Water face slight additions.

Ofwat said 12 other firms will have to return around £193m.

Of those, the country’s largest supplier, Thames Water, will pay out almost £74m to its customer base of 15 million.

The struggling firm, which faced crisis talks earlier this year over its massive £14bn debt pile, managed to secure an emergency funding package from shareholders but continues to face “significant issues”, according to the regulator.

Anglian Water customers will see more than £27m taken off their bills and Dwr Cymru about £24m.