Ofwat has launched a consultation seeking views on its proposed new approach to the methodolgy used by the water companies for reporting leakage.

The focus of the consultation is the methodology used to calculate and report leakage so that reported figures make use of increasing amounts of meter data (primarily from smart meters) and thus ensure reported leakage is more accurate, consistent, and transparent.

This consultation includes a summary of concerns with the current reporting methodology. It sets out consideration of options and preferred options only where they have been identified. It also considers a timeline for implementation of any changes.

Ofwat are highlighting that it is not a consultation on changing leakage reduction targets, nor the level of ambition expected from companies, or the outcome delivery incentive rates associated with performance against those targets.

The regulator is seeking views on the following areas:

• What aspects of current leakage reporting guidance work well and which should be improved?
• Do you agree that the Top-Down Bottom-Up approach in England and Wales remains appropriate for future reporting? What would need to happen to move to Top Down only?
• How can we best incorporate data from customer smart meters into the leakage calculation?
• Do you have any views on whether Bottom-Up leakage should continue to be extrapolated from night flows, or should we move to a 24 hour mass balance?
• Do you agree that upstream leakage should be reported as a mass balance, and do you have any views on whether that be Strategic Upstream Balances or more granular Upstream Flow Monitoring Zones?
• Do we need a metering standard and how would we incentivise companies to comply with any such standard?
• How do we incentivise accuracy as well as expecting companies to achieve leakage targets?
• Do you have views on how quickly any changes should be implemented?
• Do you have views on any investment that would be required in order to improve leakage reporting?
• Do you have any views on whether any changes should be a step change or a phased approach, and whether shadow reporting would be required?

Ofwat says that over the next 15 years the majority of customers will be fitted with smart water meters, with some companies in a position where 80% or more of their properties have a smart meter. For those companies it will be possible to improve their leakage reporting in the AMP9 2030-2035 period, for others they will be able to make incremental improvements as their smart meter roll-out progresses.

According to the regulator, a change in reporting methodology is therefore needed now to allow companies time to prepare for the next AMP.

Ofwat is consulting now to consider whether the changes could be made from the start of the next AMP and is considering what investment needs would be required against the benefits delivered by changes.

If the decision is that to deliver a marked improvement in the accuracy of reported leakage will require significant investment, (and there is a clear benefit in doing so) Ofwat says it may choose not to implement from the start of PR29.

The consultation will close on 9 October 2026.

Respondents can email Ofwat at This e-mail address is being protected from spambots. You need JavaScript enabled to view it with their response, or if they want to discuss any aspect of the consultation.

Responses can also be posted to:

Leakage 2050 Consultation response

Ofwat

Centre City Tower

7 Hill Street

Birmingham B5 4UA

Ofwat is conducting the consultation Citizen Space consultation platform – click here to read the consultation document and submit a response.