Anglian Water must pay £38.1m penalty for ‘lagging behind’ says Ofwat

Anglian Water will have to take £38.1million off customers’ bills next year and has been given the lowest ranking in a damning report from regulator Ofwat.

It was criticised for the number of incidents of pollution, failing to reach targets over reducing leaks and for the number of interruptions to water supplies.

It was one of three out of 17 companies across England and Wales described as “lagging behind” in the report and its financial penalty is the second biggest in the country for any water company this year, behind only Thames Water, which must pay £56.8million.

Across 12 measures, Anglian Water was at or above expected standards in only five - customer satisfaction, priority services, mains repairs, unplanned outages and sewer collapses.

It was behind targets on leakage, per capita consumption, supply interruptions, drinking water quality, internal sewer flooding, pollution incidents and treatment works compliance.

David Black, chief executive of Ofwat, said the report was “stark evidence that money alone will not bring the sustained improvements that customers rightly expect”.

He added: “It is clear that companies need to change and that has to start with addressing issues of culture and leadership. Too often we hear that weather, third parties or external factors are blamed for shortcomings.”

In total, water companies nationwide will be hit by penalties of £157.6 million for continuing to miss targets. Ofwat revealed that there has only been a two per cent reduction in pollution since 2019, despite firms committing to cutting it by 30 per cent. No companies were ranked as leading, with 14 ranked “average”.

On reducing annual leakage, Anglian Water has committed to a 12.4 per cent reduction, but achieved only half that, although it noted that its target is the “most challenging in the industry” and it “still outperformed all the companies that met their targets, reporting the lowest level of leakage in the industry”.

Meanwhile, its target for average water consumption is 128.9 litres per person per day, but the actual consumption is currently 132 litres.

On average, there were nine minutes and eight seconds of water supply interruptions for Anglian Water customers in 2023-24, worse than the target of five minutes and 23 seconds.

While Ofwat said drinking water quality is excellent across the country, it noted a deterioration in the sector’s Compliance Risk Index performance, which measures the risk to consumers of companies not meeting water quality regulations across their systems. Anglian Water’s 1.5 target was missed, with a score of 3.57, although this was better than the 5.15 average.

Anglian Water also recorded 2.27 internal sewer flooding incidents per 10,000 sewer connections in 2023-24, compared to the target of 1.44.

And there were 40.16 pollution incidents per 10,000km of sewer, compared to its target of 22.40. There have been 65 serious water pollution incidents in the last five years.

An Anglian Water spokesperson said: “We know that our performance needs to improve, and with the arrival of our new CEO this summer, we are focussed on a dedicated programme to accelerate results, and as critically, securing the investment we need from Ofwat to deliver the right outcomes for customers and the environment.”

The company noted that targets differ between water companies and underperformance does not always mean it is behind the industry.