A new report by the four regulators for the water sector in England and Wales on water companies’ performance is calling for the pace of progress to increase.

For the first time, the Drinking Water Inspectorate, Environment Agency, Natural Resources Wales and Ofwat have combined their evidence in a coordinated approach to provide a single overview of drinking water quality, environmental performance and customer service for England and Wales.

The report brings together regulator data and insights from their latest individual publications, using performance data for the 2025 calendar year and the financial year ending March 2026.

The regulators’ aim is that the report should help people, investors, communities and UK and Welsh Governments to understand where the sector is improving and where further action is needed.

The report says that while current performance picture is mixed, there are important strengths to build on, including:

• Drinking water quality remains among the best in the world, with 99.97% of tests meeting the required standards. The sector achieves this through adopting a proactive, risk-based approach to protecting public health.
• Fewer incidents of sewer flooding in homes and long-term reductions in leakage. These improvements show progress is possible and provide a strong platform for the future.

However, it points out that a step change in monitoring and assurance by regulators means they now have a clearer picture of where problems are arising, including:

• Too many pollution incidents and environmental permit breaches are still occurring.
• Delays in delivering funded environmental improvements.
• Some customers continue to experience long-duration supply interruptions.

According to the regulators, these are issues where companies can make rapid progress through “stronger operational grip and control, informed maintenance practices, improved asset management and a focus on outcome delivery.”

The report says:

“There is now a significant opportunity for the industry, and a strong foundation for confidence, if companies focus on delivery. …

“It is still early enough in the investment period for companies to turn plans into tangible progress, improve performance and strengthen public and investor confidence.”

The UK and Welsh Governments have outlined a major programme to transform the water system, signalling a move towards a more integrated approach to water regulation.

The regulators describe the joint report as “an important first step towards greater collaboration” which is part of wider work.

CCW - “bill payers are already questioning whether their money is being well spent”

Mike Keil, Chief Executive of the Consumer Council for Water (CCW), commented:

"People have seen the average water and sewerage bill rise by around 34% over the past 18 months, but many customers have not noticed any improvement in customer service or performance. Customers expect more for their money at a time when many water companies are failing to meet their commitments on key service areas which affect people's lives and the environment."

"People support investment and understand it takes time to bear fruit, but we know through CCW's consumer panels that bill payers are already questioning whether their money is being well spent. Customers were promised a reset of the water sector but from their perspective very little has changed."

Ofwat’s accompanying Operational Performance Report, ten water companies are categorised as good or on-track, while seven are off-track and expected to improve.

Calisen - "service and data quality have direct financial value"

Gary Adams, Operations Director for Water at Calisen, who previously led Northumbrian Water’s £160 million metering programme, commented:

“Today’s reports confirm that performance across the sector remains uneven, and Ofwat’s draft figures show that falling short on customer experience carries a real financial cost. Service and data quality have direct financial value.

“Smart metering shapes that experience at almost every point: from the installation visit, to the accuracy of the bill, and whether a customer is told about a leak they didn’t know they had. Done well, it builds trust. Done badly, it puts customer experience and financial outcomes at risk.

“Under 12% of traditional household meters have been replaced by smart meters, with the sector aiming for around 51% by 2030.

“With household consumption barely moving, at around 137 litres per person per day, the real test is whether companies can act on that data and sustain the behaviour change that follows.”