The latest security of supply Report published yesterday by Ofwat shows that the industry has improved its overall capacity to meet planned levels of service and peak period conditions.

'Security of Supply 2006-07'  looks at how well companies have managed to balance their supply of water against the demand by their customers in a way that ensures they meet their customers' needs for a safe, secure and continuous water supply now and in the future.

During the year covered by the report, water companies and their customers achieved water savings of 65 million litres (M/l) a day – equivalent to the consumption of nearly 440,000 people.

Ofwat Chief Executive, Regina Finn said: "The focus by customers and companies on using water wisely is very important when companies are calculating how much water their customers will need over time and planning to find the water resources to meet that need."

Across the whole industry, leakage fell for the third consecutive year and the amount of water lost through leakage is now one-third lower than its 1994 peak.

"This is another key piece in the jigsaw of ensuring water supplies are secure", said Regina Finn. "It is an area where companies can show their customers that they are managing the delivery of water efficiently."

Only Severn Trent failed to meet its leakage target and the company has given Ofwat a legally binding undertaking to fix this and meet future targets. Following similar action against Thames Water last year, the company complied with its commitments in 2006-07 and beat its leakage target by 20 Ml/d.

Overall, the report shows that many companies are on course to deliver the improvements that they promised to make sure they have sufficient supplies to meet their customers' needs. But there are some concerns that a few companies are not hitting targets the regulator expected them to meet in the 2005-10 price review period.

Commenting on the Report, Pamela Taylor, Chief Executive of Water UK, said,

“The industry is making steady progress in its response to the security of supply issues which are right at the top of consumers' priorities.“

"We look forward to working more closely with stakeholders and consumers in future. Everyone has a part to play in using water wisely and improving security of supply at a time of more volatile climate conditions."

Companies are currently completing 25-year water resource management plans for public consultation next year. The plans will explain the issues and comprehensive planning behind one of the world's highest quality public water supplies.