From today Ofwat has new powers to act against any water company that provides poor customer service in breach of a new licence condition, which could see the regulator impose fines of up to 10% of the company's turnover.

Ofwat expects all water companies to be focused on delivering a high level of customer service - from resolving complaints to making sure customers are informed and supported during incidents where water supplies are disrupted.

According to the regulator, while there are examples of where water and wastewater companies and their staff are going above and beyond for their customers across England and Wales, there are still too many instances where customers feel let down, and that their water company does not have customers' best interests at heart.

Recent figures published in Ofwat's annual Water Company Performance Report, show that in 2022-23 there was a fall in customer satisfaction across most companies. This follows a decline in scores in 2021-22, and customer satisfaction is lower for all companies than it was in 2020-21.

Ofwat's incidents research has also identified examples of poor customer service with companies failing in communication and support when things go wrong, leading to dissatisfaction and in some cases anxiety.

David Black, CEO, Ofwat explained:

"From today we are putting water companies on notice to improve customer service and where we see failure, Ofwat can and will take action which could result in significant fines.

"Our new powers to issue fines for poor levels of service are part of a range of measures Ofwat has recently introduced including on environmental protection, company dividends and executive pay, to drive better performance and to hold water companies to account.

"We expect this new licence condition to deliver real improvements in customer service across the sector. It is in the companies' interests to put customers at the heart of their business and provide levels of service that increase customer satisfaction."

Environment Secretary Steve Barclay said:

“We expect water companies to ensure customers are properly supported when services are disrupted.

“Enforcement action for poor customer service is an important and necessary step to restoring trust in the water sector and has been made possible thanks to government giving Ofwat increased powers to modify the licences of companies in England under the Environment Act.

“We are driving forward more investment, stronger regulation and tougher enforcement through the Plan for Water and will continue working closely with regulators to improve outcomes for both customers and the environment.”

Mike Keil, Chief Executive of the Consumer Council for Water (CCW), said:

"Every water company should provide excellent customer service but too often through our research and the complaints we handle we see people being badly let down, particularly by poor communication. A complete change in culture is needed in some companies if we’re to improve people's experiences and repair fractured trust and the new customer licence condition can help to focus minds.”

David Cheadle, acting chief executive at National Debtline, added:

“We welcome Ofwat’s improvements to the licence condition for firms which will go some way to ensuring better outcomes for customers.

“We’re particularly pleased to see the strengthening of expectations on firms to support customers struggling with their water bills and customers in vulnerable circumstances.

“We look forward to working with water companies and Ofwat to ensure that customers in financial difficulty or experiencing vulnerability are able to access the help they need when they need it.”