A report from The Public Accounts Committee has criticised water watchdog Ofwat as too weak and said it should impose maximum fines on companies which fail to plug leaks.  It also urges the regulator to consider awarding customers compensation in cases of poor performance.

In its defence Ofwat insisted that where companies had not delivered, it had taken action on consumers’ behalf.  Ofwat was described as “weak… in using sanctions against companies that under-perform”.  However an Ofwat spokesman said: “Ofwat protects consumers by keeping prices down, driving improved service and where companies fail to deliver taking effective action.”

The example of Thames Water is very revealing.  Despite missing its leakage targets every year since 2000, the company was not penalised until 2005/06. Despite having new powers to impose a financial penalty,  Ofwat did not use them, accepting instead a legally binding undertaking to carry out the £150 million replacement of 230 miles of water mains.

Committee chairman Edward Leigh was particularly scathing: “Nowhere is [Ofwat’s] limp attitude towards the industry demonstrated more clearly than in the case of the serious wastage of water by Thames Water. Thames missed its annual leakage targets for six years in a row without so much as a slap on the wrist. In future, such a wanton waste of water by a company must be rewarded with the maximum possible fine.”

In April 2007 Ofwat proposed the first fine on a water company for “repeated and serious breaches” of licence conditions - the proposed penalty amounted to 0.7% of United Utilities’ annual turnover.

Are you happy with the service from your water supplier? If you’ve complained to the regulator, did you get a satisfactory outcome?  utellus…