Welsh Water ‘very sorry’ after admitting to leaking 80 million more litres per day than reported

Ofwat has launched an enforcement investigation into Welsh Water after the company reported an issue with its own leakage and per capita consumption (PCC) reporting.

This comes just days after the water watchdog launched a similar investigation into South West Water over a similar problem with the same metrics. 

Ofwat assesses companies performance against its leakage and PPC  annually, and has the power to force companies to reduce or increase their customer’s bills, depending on their performance. 

Welsh Water’s total leakage figure for 2021/22 was 240.3 million litres per day (ml/d), compared to 157.4 ml/d previously reported. This is a difference of 82.9 ml/d. 

The leakage data is also linked to PCC data, which in turn reduced from 174.7 litres per day to 154.8 litres per day.

According to the regulator, Welsh Water reported this discrepancy to Ofwat after an internal review. 

Ofwat deferred its decision on what to do about the leakage data in November 2022, as it “sought to understand how the company calculated its reported performance”. 

Welsh Water has confirmed today that in the coming months it will credit £10 onto the accounts of its 1.3 million household customers and its 100,000 business customer accounts, at a cost of around £14 million in total. 

Pete Perry, chief executive of Welsh Water, said the company is “very sorry and disappointed”, and noted the company is investing an additional £54 million over the next two years to identify and reduce leakage “as quickly as possible”. 

He continued: “Whilst our robust assurance process ultimately identified the issue, there were failures in our governance and management oversight processes that allowed this in the first place.

“We have made the necessary changes to how we manage leakage reporting and closed the gaps in our reporting and governance processes.”

Emma Clancy, chief executive of the Consumer Council for Water (CCW), said it recognised that Welsh Water had “moved swiftly” to admit its mistake and welcomed the rebate. 

She noted: “It is reassuring that the company identified the issue through its own assurance processes. Customers will want the company to take the right steps to ensure this doesn’t happen again. 

“Our research shows leakage from water companies affects customers’ own motivation to save water so Welsh Water will need to build trust on this issue.”

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. This is equivalent to around 424,000 olympic swimming pools. 

David Black, Ofwat chief executive, 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 recognise that Welsh Water came to us when it became aware of the issue with the accuracy of its performance data.

“Ofwat's investigation will consider Welsh Water's restated performance figures, the circumstances that led to the company reporting inaccurate performance, and what steps it has taken or is taking to address these failings.”