Defra, the Environment Agency and Ofwat are calling on a number of water companies to take further action following the regulators’ assessment of the individual utilities’ Water Resources Management Plan (WRMP) Annual Review 2025.

In some instances, the letters sent jointly from the regulators point out that the latest assessments follow previous letters over a number of consecutive years where they have raised their concerns.

Letters have been sent to the following water companies:

• Albion Water (NAV)
• Anglian Water
• Cambridge Water
• Essex and Suffolk Water
• Portsmouth Water
• South East Water
• Southern Water
• South Staffs Water
• South West Water
• Thames Water

The letters flag up concerns over a variety of issues, including security of supply, risks to the environment and ability to support planned growth. Each letter sets out in detail particular concerns, potential adverse impacts, actions required and deadlines, together with requirements of written evidence of the actions taken.

The regulators have raised particular concerns with Thames Water and Southern Water, saying to both companies that “progress has been significantly delayed” and it is “imperative” that they accelerate their response.

Thames Water - a long-standing issue with leakage and “transformation plan for leakage has not delivered”

Pointing out this is the third consecutive year that Thames has received a joint letter from the regulators, the regulators have flagged up security of supply and are calling on the company to take immediate action to address the issues set out in the letter.

In summary, the regulators point out that Thames Water has “a long-standing issue with leakage, saying that despite reduced leakage in all water resource zones (wrz) apart from Swindon and Oxfordshire, overall leakage levels are 7.6% above the WRMP24 forecast. “Your transformation plan for leakage has not delivered,” the letter says. Thames’ leakage performance has been off track against WRMP19 forecasts for the past 3 years – the regulators warn that this “causes uncertainty around (Thames) ability to deliver sustained reductions.

It goes on to flag up the “continued unavailability of the Gateway desalination plant” at its Beckton works, which continues to experience long-term outtage due to the “unavailability of approved membranes.”saying this is of particular concern for the resilience of the London WRZ. The letter acknowledges that Thames has set out the work that is underway to bring “bring this source back to its planned deployable output of 75Ml/d by the end of AMP8.”

The regulators want Thames to continue to deliver the planned works to “reinistate the planned deployable output for Gateway desalination as soon as possible”, and also explore opportunities to “address the membrane availability issues” and “any other opportunities” to accelerate the reinstatement.

Request for Thames Water to submit revised WRMP annual review

Referring to the South East Strategic Reservoir Option (SESRO) for which Thames is a joint sponsor with Southern Water and Affinity Water, the letter says that Thames’ SESRO RAPID Gate 3 report contains details of “substantial increases” in the costs of the SESRO scheme. The regulators comment:

“We expect the WRMP Annual Review process to be the primary process through which changes that affect your plan are notified and evidenced. We request that you submit a revised WRMP annual review and formally communicate the request that you submit a revised WRMP annual review and formally communicate the implications of the SRO cost changes on your preferred plan, including up-to-date information on feasibility, best value and affordability of your plan by 22 May 2026.”

Regulators warn Southern Water over persistent under-performance on WRMP delivery for past six consecutive years

Writing to Southern Water, the regulators point out that this is the sixth consecutive year that the company has received a joint letter. While the regulators welcome the company’s recent progress in outage and leakage reduction specifically in the Sussex North zone, with a substantial reported decrease in total leakage, they go on to say:

“However, there has been persistent under-performance on WRMP delivery, including leakage reduction, for the past six consecutive years. This has put both customer supply security and the environment at unacceptable risk. In many cases the 2024/25 outturn data does not achieve your planned WRMP. Escalation of WRMP non-delivery could include investigations and enforcement by the relevant regulators.

Key concerns flagged up include:

• Average household per capita consumption (PCC) above its planned forecast WRMP19 in 13 out of 14 your zones. Company level PCC is 13% or 16.6Ml/d above forecast. This is a recurring issue. Company level dry-year uplifted PCC is 140.9l/h/d against planned forecast 124.3l/h/d in WRMP19.
• Made insufficient leakage reduction to meet WRMP forecasts despite it being a priority concern raised last year (AR24)…..it is essential that efforts are intensified to bring all zones back on track. We expect the company to take action to ensure it can fully deliver its targeted reduction across the 2025-30 period.
• Not delivered the WRMP19 supply schemes as planned. The AR25 narrative lacks transparency regarding potential further delays and does not explain the implications of delays and increased reliance on drought options to service level improvements.
• Key risks include potential delays to the Sandown, Littlehampton, and Medway water recycling schemes, as well as the unavailability of the Candover drought order.
• Not explained the known vulnerability of the Portsmouth Water exports to Sussex North and Hampshire Southampton East (15 Ml/d each) at times of low flow, and the risk to customer supplies.
• Not sufficiently reduced overall distribution input in 11 out of 14 zones which exceed forecasts by more than 5% since AR24, despite a year of unchallenging weather conditions. The company’s limited demand reduction progress is raising serious concerns about the effectiveness of its water efficiency strategies.
• Reported 15% lower deployable output (DO) in Sussex North than WRMP19 forecast, creating significant concern with ongoing water neutrality issues and delayed delivery of critical WRMP water resource schemes.

The regulators are calling on Southern Water to take immediate action to improve performance on per capita consumption (PCC) and leakage management.

“We remain concerned regarding your ability to manage and drive forward projects and we require further evidence of how you are addressing this challenge,” the letter says.

Range of issues flagged up with other water companies

Issues raised with other water companies where they are expected to take action include:

Cambridge Water - third consecutive year the regulators have sent a joint letter. Concerns that Cambridge Water’s performance in relation to deployable output, the supply-demand balance, meter installation, non-household consumption and outage are not on target. These issues alongside high-profile development and water resources pressures mean “we have serious concerns with Cambridge Water’s security of supply and ability to adequately support planned growth as well as risks to the environment.”

South West Water – sixth consecutive year the regulators have sent a joint letter. Reported total leakage of 107.76Ml/d is 12.4% above WRMP forecast of 95.9Ml/d. Noty on track to to meet WRMP24 starting position for leakage of 99Ml/d. As the sister company to Bristol Water under Pennon Group PLC, letter highlights that Bristol Water is currently 14.4% behind planned reduction target. For its Bristol Water operating area, Pennon Group must now take “urgent action” to reverse this downward trend.

Essex & Suffolk Water – concerns relating to delivery risks for three WRMP24 supply schemes: Suffolk Strategic Network, Lowestoft Advanced Recycling Plant ( both delayed to 2033-34)and Linford Water Treatment Works (delayed to 2029-30).

Portsmouth Water - sixth consecutive year the regulators have sent a joint letter. Serious concerns highlighted with regard to security of supply. Reported leakage and Per Capital Consumption(PCC) levels above forecast and do not align with WRMP baseline assumptions.

Anglian Water – continuing concerns with security of supply. Reported 2.7% increase in total leakage since last year – leakage levels remain significantly higher than WRMP forecasts. The third consecutive year AW has not met its leakage forecast.

South East Water – fourth consecutive year it has received a joint letter. Above forecast leakage level for three consecutive years and it is currently at the highest it has been during AMP7.

South Staffs Water - sixth consecutive year it has received a joint letter from the regulators.