Water company investment on totex was 8% below forecast in 2015-16, according to Ofwat – the water industry regulator said it does not expect companies to continue under-spending to this extent in the remaining four years of AMP6.
The warning comes in the first report to be published by Ofwat monitoring the overall services delivered by the largest 17 appointed monopoly water and wastewater companies that deliver services to customers.
Commenting on overall sector investment, the report says total expenditure - totex - was 8% below Ofwat’s forecast for 2015-16, with the regulator warning:
“We do not expect companies to continue under-spending to this extent in the remaining four years in this price review period (2016-20).”
“We only expect to see companies spending less than they planned where this is the result of them being more efficient − not because they are failing to deliver the outcomes which they said they would.”
Investment levels varied between companies − for example, United Utilities spent 15% above Ofwat’s forecast while Thames Water was in line.
The report says the variance was attributed to a range of reasons including bringing investment forward, adjusting plans which delayed investments, and simply efficient spend.
Ofwat: no major concerns so far but mixed picture among companies
Introducing the report, Ofwat said:
“We have no major concerns so far but there is a mixed picture among companies. However this is only the first year of five for the delivery of these outcomes and performance commitments and concerns may emerge in future years. Some companies are doing well, but some have received significant penalties too.”
Overall, rewards in delivering wholesale wastewater service earned by the companies came to £35.5 million in total –but they received penalties totalling £4.1 million for their wholesale water service.
Thames Water received a £11.7 million penalty due to a reporting issue identified by their internal audit team.
Better weather conditions benefited some companies in 2014-15 and 2015-16 in terms of performance improvements, especially on sewer flooding and pollution incidents. However, other companies’ performance was hit by storms Desmond and Eva - United Utilities and Yorkshire Water both faced major flooding .
All 10 water and wastewater companies have a performance commitment that covers minor (category 3) pollution incidents - 9 of the 10 met their comparative 2015-16 target for category 3 pollutions incidents.
Across all wastewater pollution incident performance commitments (categories 1-4) five companies (Anglian, Severn Trent, United Utilities, Dŵr Cymru and Yorkshire) earned rewards totalling £18.76 million. Only one company (South West) earned a £1.73 million penalty.
On asset health, the report says companies delivered the majority of their 2015-16 target service levels. However, Thames Water did not meet their service level for asset health for their (below ground) water infrastructure and earned a penalty of £4.675 million. United Utilities did not meet their ‘reliable water service index’ performance commitment, earning a penalty of £7.974 million.
Click here to download Water and wastewater companies overall service delivery report for 2015-16.
With the UK government demanding a 50% reduction in storm overflow spills by 2029, the era of reactive management is over. Speaking in the House of Commons on 21 July 2025, then environment secretary Steve Reed said, “This Government will cut water companies’ sewage pollution in half by the end of the decade.”
ERG, the leading supplier of odour control systems and industrial gas cleaning & thermal systems, has been awarded the coveted King’s Award for Enterprise.
Welsh Water’s new artificial intelligence-driven tool, ORAI, has been shortlisted for three categories at the prestigious British Data Awards 2026 – underscoring the company’s commitment to using cutting-edge technology to deliver better outcome for customers.
Barhale has completed work on two separate Rapid Action Taskforce Spills projects it is carrying out for Severn Trent.
Hear how Scottish Water has completed its £235 million Ayrshire Glasgow Resilience Project - customers across Greater Glasgow, Ayrshire and East Renfrewshire will now benefit from a more secure and resilient water supply.
Hear how United Utilities is accelerating its investment to reduce spills from storm overflows across the Northwest.
Find out more about the remarkable career opportunities on offer at WSP - scroll down to watch the inspirational video.