Ofwat consults on underperformance and outperformance payments for four water companies

1 Nov 2018 12:27 PM

Ofwat will today begin consulting on proposed outperformance and underperformance payments for four of the seventeen water companies in England and Wales, to be applied from April of next year.

All water companies have committed to improve their performance for 2015-20 based on customer consultation. Companies that deliver above and beyond for customers, can earn outperformance payments while companies that do not meet their commitments can incur underperformance payments. Where underperformance reflects breaches of licence conditions, Ofwat may take further enforcement action, as it did against Thames Water in June of this year.

Severn Trent Water applied for the limit on the amount of money it can receive in outperformance payments to be removed. As a result Ofwat is also consulting on changes to how Severn Trent Water’s outperformance and underperformance payments are calculated in future. The proposed changes reset Severn Trent Water’s targets for sewer flooding and pollution, to ensure that its performance does not fall, and that only improvements above and beyond those it has already made could receive outperformance payments. We also propose to reduce the rate at which outperformance payments are earned.

David Black, Ofwat’s Senior Director, Water 2020 said:

“For companies that go truly above and beyond, setting new standards across the sector, our approach means there can be hard-earned payments; but companies that fail to live up to their commitments will have to return money. This helps to push companies to focus on what matters most to customers.”

Ofwat Press Office:

Tel: 0121 644 7642
Mob: 074 5801 6085
Email: fintan.hastings@ofwat.gsi.gov.uk

Notes to editors: