Following the publication of Ofwat’s report into the misreporting of performance data relating to leakage and per capita consumption, Welsh Water has reiterated its apology for this issue that it reported to Ofwat and began investigating in 2022.

Welsh Water said the key conclusions of Ofwat’s report align with s own investigation that was shared with the regulator in May 2023.

In March 2023, Welsh Water proposed to the regulator a customer redress package of £30 million which included a £10 rebate for customers which was made during 2023. In addition, it has proposed £59 million of expenditure to improve leakage and per capita consumption performance. Ofwat has accepted these proposals and issued a nominal penalty of £1.

The issue relating to the misreporting of this data was initially identified by Welsh Water’s annual assurance process and brought to Ofwat’s attention in 2022. The company’s investigation identified failures in its governance and management oversight processes. Welsh Water subsequently made changes to its processes and operational structures to address the issues identified as root causes.

Pete Perry, Welsh Water Chief Executive said,

“We are very sorry that this happened. We proactively brought this issue to Ofwat’s attention in April 2022 having identified it as part of our annual performance assurance process. Ofwat’s key conclusions as to what went wrong align with our own investigations that were shared with Ofwat together with our proposals for customer redress and additional investment to tackle leakage and per capita consumption. Rebates have already been made to 1.4 million customers.

"Our review identified governance and management oversight failures that led to the issues identified which have now been addressed. Achieving the planned reduction in leakage will be challenging, but we have committed a substantial increase in expenditure in this area and strengthened the relevant operational teams to recover performance.”

Welsh Water’s internal review of its leakage and per capita consumption reporting concluded that elements of its calculations for these key measures for the years 2020-2022 did not comply with regulatory requirements.

The data showed that leakage had been running at a much higher level than was previously recognised.

The review identified governance and management oversight failures that led to the issues identified during the assurance process and which have now been addressed.

The restated figures show that leakage is higher than previously reported whilst per capita consumption is lower. The two measures are inherently linked.

Total leakage for 2021/22 was 240.3 ml/d compared to 157.4 ml/d previously reported. This is equivalent to 8.6 m3 per km of main per day and compares with the latest available industry data (from companies’ annual performance reports for 2021/22) which ranges between 4.5 m3/km/day (Anglian) and 18.7 m3/km/d (Thames Water).

Restating per capita consumption data to reflect the change results in a reduction from 174.7 litres/day to 154.8 litres/day. Latest available comparative data (from companies’ annual performance reports for 2021/22) shows that per capita consumption by company in England and Wales ranged between 131.5 litres/day (Yorkshire) and 160.3 litres/day (Portsmouth Water).