Northumbrian Water allowed small rise in bills after hitting incentives

The company was one of only four water suppliers not hit with penalties by the watchdog Ofwat

North East water firm Northumbrian Water will be allowed to increase bills by a small amount after escaping fines handed out to most of its counterparts for poor performance.

Watchdog Ofwat has issued penalties of £157.6m to 13 water companies around the UK after missing targets on pollution, leaks and customer satisfaction. But Northumbrian Water is one of four firms allowed to increase bills as part of an incentive scheme, being permitted to charge £7.8m more than previously allowed.

Ofwat’s annual review of water firms ranked Northumbrian Water as ‘average’ against the targets it set in 2019 for a five-year period until 2025. No firm was judged ‘leading’ but Northumbrian Water received praise in areas including customer satisfaction, mains repairs and preventing internal sewer flooding.

The watchdog highlighted a 65% rise in pollution incidents with Northumbrian Water, but also highlighted the company’s “novel” use of AI to better understand pollution in its area.

A Northumbrian Water spokesman said: “The Ofwat company performance report recognises that we are one of only four companies who have delivered an outperformance of our targets for our customers, although the categorisation means that we are scored as ‘average’ alongside 13 other water companies.

“We are an industry leader for the lowest number of customers affected by internal sewer flooding, something that is incredibly important to us and to our customers, and the report highlighted our good progress around the issue. We’re pleased to also be one of the top performing companies for Ofwat’s measure of customer experience and service, demonstrating our commitment to be the very best water company when it comes to serving and supporting our customers.

“We know there is more to do. The hard work will continue, and we will keep on improving, working hard for our customers, our communities and helping improve our environment.”

Earlier this year it was announced that Northumbrian Water was one of three firms that would be fined over the release of sewage into rivers and the sea. The firm faces a lower penalty than Thames Water and Yorkshire Water, while the UK’s other water suppliers are still under investigation.

Ofwat has suggested that the company should be allowed to raise its bills from an average of £415 a year to £460 over the 2025-2030 period. The company has said that would not allow it to make enough investment in its network and wants a bill of just over £500, which it said would allow it to spend more than £5bn on environment and other improvements.

A final ruling on that request will be made in December, though Northumbrian would remain the lowest bill in the country for a full-service water company even it allowed its planned rise.