Leakage falls by daily need of one million consumers

Water companies in England and Wales reduced the amount of water lost to leakage by nearly 160 million litres of water (Ml/d) a day. This is equal to the daily needs of around one million domestic consumers.

Figures released by Ofwat today reveal that for 2006-07 overall leakage fell:

from 3,575 Ml/d in 2005-06 to 3,420 Ml/d; and

by 65 million litres a day more than the industry target of 3,485 Ml/d.

Ofwat Chief Executive Regina Finn said: "Reducing leakage is one very important way to ensure that we use water efficiently. By beating its leakage target for the year ending March 2007, the water industry has demonstrated that it can respond to customer needs driven by issues like water shortages and drought. We expect the industry to continue to respond to these challenges and continue to hit their regulatory targets."

Only one water company did not meet or exceed its target. Severn Trent Water's target was to reduce leakage by 17 Ml/d. Leakage did fall by 9 Ml/d, but the company missed its leakage target by 8 Ml/d.

Ofwat has secured a legally binding undertaking from Severn Trent Water that binds the company to achieving its leakage reduction targets for the next three years and improving its ability to deliver its planned level of water service to consumers. The company has underpinned this with a commitment to spend an extra £45 million at the expense of its shareholders.

Severn Trent Water has also agreed to reduce charges to its customers in 2008-09 by around £12 million.

Ms Finn said: "Despite favourable conditions, in particular a very mild winter, Severn Trent Water failed to meet its leakage target. This is unacceptable. The company will now have to make huge efforts to put this right. The money it needs to spend to do this will not come from customers. Should Severn Trent Water not live up to this commitment, enforcement action will follow, including fines if necessary.

"We recognise that Severn Trent Water faces other more immediate priorities in dealing with the aftermath of recent floods, but it must not lose sight of the work that it needs to carry out to control leakage."

Thames Water, which previously failed its leakage target, has this year exceeded its leakage target by 20 Ml/d. The company reduced leakage to 790 Ml/d. The company is bound by a legal undertaking given to Ofwat to continue achieving demanding future leakage targets, with the target for 2010 set at 690 Ml/d. To do this Thames must replace an extra 368km of ageing pipes that will cost its shareholders around £150m. This extra investment is equivalent to more than £40 for each consumer supplied with water services by the company.

Ms Finn said: "Thames Water's success is good news for its customers. It shows that Ofwat's approach of focussing the company on fixing the problem at its own expense delivers the best outcome. But the company cannot afford to be complacent. There is still a lot more work that needs to be done, and, as with Severn Trent Water, failure to live up to their commitments will lead to swift enforcement action."

Ann Robinson, Director of Consumer Policy at uSwitch.com, the independent price comparison and switching service, comments: “Ofwat deserves credit for beginning to mop up an industry that has underperformed for a number of years. While we have seen water losses stemmed by 160 million litres a day - and this is a step in the right direction - it has to be remembered that this is merely a drop in the ocean when compared to the ongoing daily leakage from the UK’s antiquated water systems.

“Severn Trent continues to be the bad egg of the water industry – its leakage targets were missed by over 8 million litres per day. Its customers can be pleased that Ofwat has demanded that it commits £45million of shareholders’ money to reduce leaks further over the next three years. But consumers will be less than impressed with the miserly £4 reduction in bills in 2008 – 09. This reduction is little more than tokenism and reflects just 1.5% off the average bill. Let’s not forget that water bills have already risen by an average of 7% in 2007.

“Severn Trent needs to reduce its leakage by 25 million litres per day by 2009-10 if it is to meet Ofwat’s targets – judging by today’s figures it will fall far short unless urgent improvement is made. All other water companies have managed to stem the flow so why can’t they?

“Last summer’s droughts and this year’s floods have emphasised what a precarious state the water industry is in. The fact that the UK is still losing 3.4 billion litres of water each and every day indicates that there is no room for complacency. In no other industry would wastage on this scale be acceptable - the water industry must now shake off its poor track record, roll up its sleeves and seriously get to work.

“In the meantime, despite the current over abundance of water and the wilful wastage of suppliers, households still need to treat water as a precious commodity and seek to preserve it. Water efficiency must remain high on the consumer agenda.”

To help consumers with their water efficiency uSwitch.com introduced a water calculator on its site in February 2005. In its first year, the uSwitch.com water calculator helped over 50,000 users save money on their water bills by switching to a meter or implementing water saving devices or measures.

Customers could save £125 a year by switching to a water meter