UK water companies ordered to repay customers £67m

The regulator has ordered British water companies to repay customers a total of £67m as a penalty for missing performance targets.

Thames Water, the supplier for London and the Thames Valley area was issued with the largest repayment order and will lose out on a whopping £53.2m. Southern Water will repay £46m while South West Water will lose out on £15.4m in uncollected fees.

“We are extremely disappointed with our performance and sorry for the impact this has had on customers and the environment,” a spokesperson for Thames Water told City A.M.

“While we’re heading in the right direction, we have a long way to go,” the spokesperson added referencing the company’s failure to meet 23 of 49 performance targets.

Disruptions to supply, sewer blockages and poor maintenance of the network were among the reasons cited for the multi million pound repayment order.

“Ofwat is committed to ensuring water companies provide the very best service for customers,” water regulator Ofwat said in a statement.

The penalties are issued to incentivise private suppliers to put money back into businesses instead of simply dishing out dividend payments. Because there is only one water supply company in each UK region companies do not need to bank on a strong performance to retain customers.

“We set them challenging targets in the interests of customers and the environment and these payments are a key way of ensuring that companies are incentivised to go above and beyond for customers, and that customers receive money back if they do not,” the regulator explained.

Water companies in England have dished out more than £2bn a year on average to shareholders since they were privatised three decades ago.

The repayment orders today come months after Southern Water was issued a £90m fine for dumping billions of litres of raw sewage into protected seas.

Britain’s water regulator also recognised some stand out performances from water companies which were rewarded for exceeding expectations. Severn Trent Water will receive £25m while West Wessex water will be able to recover £20.5m from customers for outperforming its commitments.

Read more: Government U-turns over water firms dumping sewage in English rivers