Water companies have been ordered to return a collective £157.6m to customers via lower bills next year after the water regulator announced they had fallen behind on meeting key targets.

Ofwat, the watchdog for the 17 largest water and wastewater companies in England and Wales, confirmed that this the fourth year in a row that water firms have had to refund customers.

According to Ofwat’s annual performance report for 2023/24, water companies are “falling further behind” on key targets for pollution and internal sewer flooding, with no company achieving the regulator’s “leading” status for the second year running.

Thames Water has been ordered to make the largest repayment to customers of £56.8m, although the company’s overall performance did show an improvement from last year.

Anglian Water (£38.1m), Yorkshire Water (£36.0m) and Southern Water (£31.9m) have also been ordered to return significant amounts.

While the latest figure is down from the record £177.6m that firms were asked to return in 2022/23, Ofwat CEO, David Black, said that the UK’s water companies need to change and must address “issues of culture and leadership”.

“Too often we hear that weather, third parties or external factors are blamed for shortcomings,” Black said.

“Companies must implement actions now to improve performance, be more dynamic, agile and on the front foot of issues. And not wait until the Government or regulators tell them to act.

“As we look towards the next price control, the challenge for water companies is to match the investment with the changes in company culture and performance that are essential to deliver lasting change.”

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