Ofwat gives four water companies early notice over proposed spending plans

The regulator Ofwat has flagged 'substantial' concerns about the proposed finances of four water companies.

Ofwat said it had given Anglian Water, SES Water, Thames Water, and Yorkshire Water early notice of "substantial concerns" about their proposed costs for maintaining base expenditure, otherwise known as business as usual service, for the 2020-2025 period.

All water companies must submit their proposed spending plans to the regulator for review. Ofwat said that following the review, it had found a "significant gap" between its view of efficient retail and wholesale costs, and the four companies’ proposals.

Anglian, Thames and Yorkshire are seeking permission for Ofwat to allow them "significantly" more money than currently spent on base expenditure for wholesale and/or wastewater services. SES is seeking increased costs for providing retail services.

David Black, senior director at Ofwat, said: "We said we would scrutinise each and every plan in detail to ensure they are robust enough deliver a high quality affordable and resilient service to customers in the next five years and beyond.

"We are disappointed that revised proposals from Anglian Water, SES Water, Thames Water and Yorkshire Water have not yet risen to the challenge we have set them.

"For this reason we have taken the step of writing to these four companies now, to allow them additional time to reconsider and ensure they are in the best interests of customers."