Ofwat has told 14 water companies to revise their five year AMP7 business plans running between 2020 and 2025.
Of the 17 water companies to submit plans, only three – Severn Trent, South West Water and United Utilities – received the green light by the water regulator.
Four companies - Affinity Water, Hafren Dyfrdwy, Thames Water and Southern Water - were highlighted by Ofwat as “having the most work to do” in order to meet targets set out by the regulator.
Their plans will need a “substantial rework” according to the assessment.
Targets for the sector in the next funding period include a 15% leaks reduction, a 45% cut in emissions and an 80% reduction in pollution incidents.
Ofwat chief executive Rachel Fletcher said the regulator was challenging companies to “deliver more for less” to their customers in the next five-year funding period.
“We have challenged all water companies to deliver more for less for customers over the next five years,” she said. “We’re seeing an increased focus on the things closest to people’s hearts such as keeping bills affordable, cutting leakage, protecting the environment and helping those most in need.”
Flecher added that the rest of the sector had to meet the same high standards as Severn Trent, South West Water and United Utilities.
“Three companies have already stepped up to the mark with high quality plans and stretching commitments to customers for the next five years. The rest of the sector now needs to meet this high standard so that customers across the country get better and more efficient services”.
Thames Water chief executive Steve Robertson said that the company was disappointed its business plan wasn’t one of those to win immediate approval.
“Thames Water is disappointed with today’s announcement from Ofwat on our £11.7bn five-year business plan, which is built on the feedback of nearly 1M customers,” Robertson said. “We remain committed to our forward-looking plan, which prioritises investment over everything else - including shareholder dividends.”
Ofwat will return its final determination of business plans in December this year. Companies categorised as needing “significant scrutiny” or “slow track” must submit revised plans by April.
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