Welsh Water has been ordered to pay £40 million after the industry regulator Ofwat found it made “indefensible” mistakes in reporting leakage and water usage data. The penalty includes a £10 rebate for each of its 1.4 million customers, which was already announced last year.
Ofwat began investigating in May 2023 after Welsh Water’s internal review uncovered “governance and management oversight failures” in data reporting. The investigation found that over five years, the company misreported figures, significantly underplaying poor performance on leakage and per capita consumption.
David Black, Ofwat’s chief executive, said the company had “misled customers and regulators on its record of tackling leakage and saving water”. He stressed that trust is essential for the billions of pounds needed to improve water infrastructure over the next 30 years.
Welsh Water stated that the actual penalty imposed by Ofwat was a nominal £1, with the £39.4 million compensation package aimed at benefiting customers. The company will also invest an extra £59 million by 2025 to upgrade infrastructure and address poor performance on leakage and water use targets.
Chief executive Peter Perry apologised, saying the company “proactively brought this issue to Ofwat’s attention in April 2022” and has since addressed the governance failures. He acknowledged that achieving planned leakage reductions would be challenging but reaffirmed commitment to increased expenditure and strengthened operational teams.
