Ofwat hits out at water suppliers’ business plans
London’s water supplier was among four slated by Ofwat this morning as the regulator said it was “disappointed” by the firms’ request for more money to cover costs.
Thames Water, Anglian Water, Yorkshire Water, and SES Water were told that their business plans do not live up to the regulator’s expectations.
Read more: Regulator Ofwat rejects water firms’ five-year business plans for ‘failing customers’
The former three “have asked us to allow them significantly more money than they currently spend on base or on-going expenditure” for wholesale or wastewater, Ofwat said.
Meanwhile, SES Water expects higher costs for retail services.
“We are disappointed that revised proposals … have not yet risen to the challenge we have set them,” said Ofwat senior director David Black.
“For this reason, we have taken the step of writing to these four companies now to allow them additional time to reconsider and ensure they are in the best interests of customers.”
It is the second time that Ofwat has named Thames Water as it prods suppliers to improve their efficiency. This will allow firms to offer better service, protect the environment and keep bills down.
It is currently reviewing the 2020-25 business plans of water suppliers.
In January the regulator said Thames Water fell “significantly short” of Ofwat’s view of cost-efficiency.
It said at the time that it was worried about Ofwat’s feedback on its plan and that without investment it may not meet customer needs and expectations.
Thames Water today declined to comment.
It comes a day after it said it would axe 350 jobs in an efficiency drive, and could “potentially” remove a further 300 roles by not filling vacancies and by terminating contractors.
Thames Water said: “The jobs in question are primarily in support functions and management levels across London and the Thames Valley.”
Read more: Thames Water unveils £1bn tech investment in bid to boost efficiency
SES said it had reduced the gap between its January proposals and Ofwat’s expectations by £2m. But “clearly there is still a challenge that we need to respond to.”
Yorkshire Water said it believes its plan “delivered ambition at an affordable price in line with Ofwat’s aspirations.”
Anglia Water said: “As the company serving the driest and one of the fastest growing parts of the country, we’re confident our plan is the right one to ensure a sustainable future for our region.”