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2017-18 Water Company Performance

Ofwat have published their Service and Delivery Report analysing how the large water companies have performed against their business plan commitments for 2017-18, the incentives earned and totex performance behind the service customers received.

In 2017-18, in comparison to 2016-17 there was a 1% reduction in the number of performance commitments achieved across the sector. The reduction in performance reflects the issues that some companies experienced managing the effects of the freeze-thaw event in late February and early March 2017-18. Additionally, performance commitment targets were more stretching in 2017-18 than in previous years. Consequently, companies have more to do to ensure they meet their performance commitments.

During 2017-18 the sector out-performed totex although by less than 1% - on the allowances determined at PR14. This is a reduction in outperformance compared to 2015-16 and 2016-17, when the majority of companies reported cost savings beyond those anticipated at PR14 and the sector outperformed by 6% and 5% on average in each year respectively. The reported Return on Regulated Equity (RORE) figures show that most companies continuing to report outperformance on expenditure have also reported outperformance of performance commitments with financial incentives, although this is not universal.

Customer service and satisfaction - as measured by the Service Incentive Mechanism – has increased year-on-year within the current price control period to date, including 2017-18.

Examining service delivery between 2016-17 and 2017-18 the sector improved performance for:

Pollution incidents – 13% more performance commitments achievedInternal sewer flooding – 40% more performance commitments achievedWater quality contacts – 15% more performance commitments achieved.

However, sector performance deteriorated for:

Leakage – 17% fewer performance commitments achievedWater supply interruptions > 3 hours – 41% fewer performance commitments achievedWater quality compliance – 44% fewer performance commitments achievedWater consumption – 10% fewer performance commitments achieved

In other aspects of financial monitoring companies, Ofwat has published the following:


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