Ofwat opens investigation into accuracy of South West Water’s leakage reporting

Ofwat has launched an investigation into South West Water over the accuracy of its leakage reporting.

Water companies are set performance targets by the sector’s economic regulator, Ofwat, on leakage and per capita consumption and assessed against them on an annual basis. 

According to Ofwat, in November 2022 it deferred a decision on the progress South West Water had made towards its leakage performance commitment, “as it sought to understand how the company calculated its reported performance”.

Today the regulator announced an enforcement investigation is being launched into the company. 

David Black, chief executive of Ofwat, said: "We are committed to holding companies to account for performance and for sharing timely, accurate, and complete data with us and their customers. 

“We want to ensure that is the case here. A thorough investigation will now be carried out and we will provide updates in due course on our findings and whether there is any further action Ofwat needs to take.”

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Water companies report their own leakage figures to the regulator, as is the case with sewage pollution discharges where firms report to the Environment Agency. 

Companies are supposed to arrive at the leakage volumes by using Ofwat’s methodology, looking at water balances as well as measuring minimum night flows in distinct metered areas (DMAs). The two assessments are then reconciled using a ‘maximum likelihood estimate’ to arrive at the final figure. 

According to Ofwat’s provisional leakage volumes in 2021/22, water companies in England and Wales lost an average of 2,923.8 million litres of water per day, equating to 1.06 trillion litres over the year.For South West Water, this is not the first investigation opened against the company by Ofwat. Last year, the regulator announced it had launched an enforcement case against the company over its treatment of sewage, seeing it become the sixth water company to be investigated for the same issue. 

A South West Water spokesperson said: “It’s important our customers have confidence in our data. That’s why we rigorously check our data which is externally audited by an independent third party. We will of course provide any information the regulator requests and we will fully cooperate.”