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Sir John Bourn, head of the National Audit Office, told Parliament today that, since the 1995 drought, leakage in England and Wales has been reduced by some 1.8 million cubic metres a day, equivalent to the amount of water used daily by more than 12 million people.

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The National Audit Office examined how the Office of Water Services (OFWAT) have carried out their responsibilities for regulating the way water companies in England and Wales manage leakage and promote the efficient use of water. They found that, since 1995, leakage has fallen from 31 per cent of the water put into supply to 22 per cent and that water companies are now in a stronger position to maintain the supply of water to their customers in dry weather. Water companies have also made progress in promoting water efficiency to reduce the amount of water wasted by customers.

But, leakage in England and Wales remains at more than 3 million cubic metres a day – nearly half the average flow rate of the River Thames in London – and the balance between the supply and demand for water is still tight in some parts of the country, principally in the south east of England. And the effectiveness of the different types of action taken by water companies to promote water efficiency remains unclear.

OFWAT now need to address several important unresolved issues. These include the uncertainty that remains over the total level of leakage, whether there is scope for reducing leakage in a cost-effective manner and the need to establish which actions to encourage customers to use water more efficiently are actually worthwhile.

Sir John commented:

“I am pleased that as a result of the improvements made by the water industry since the mid 1990’s leakage levels are now generally better than average by international standards. OFWAT will need to ensure that water companies maintain their focus on managing leakage and encourage their customers to reduce the amount of water they waste.”

OFWAT are attempting to reduce most of the uncertainties surrounding leakage in a study commissioned jointly with the Department of the Environment, Transport and the Regions, and the Environment Agency and through improved information and research into water efficiency commissioned by the industry. In this context, the National Audit Office recommend that in taking forward their work OFWAT should:

  • Encourage companies to improve the quality of estimates of unmetered domestic consumption. The variations between companies’ estimates have resulted in uncertainty about the total level of leakage and make it difficult for OFWAT to monitor progress against leakage targets and to assess the scope for further reductions.
  • Consider how the importance of securing supply to customers can best be taken into account when regulating leakage. Companies with high leakage and a small margin between the supply and demand for water are likely to need to reduce leakage further and OFWAT consider that there may be scope for this to be done without increasing costs overall.
  • Reflect the potential benefit to the environment of reducing leakage and improving the efficiency with which customers use water. There is uncertainty as to how the costs and benefits to the environment and Society of leakage reduction and water efficiency should be calculated.
  • Establish the financial costs and benefits of leakage control and the scope for reducing costs through technological advances. The value of water saved by reducing leakage and promoting water efficiency is uncertain and companies’ estimates of the value of the water saved have varied to such an extent that OFWAT have told them to resubmit their estimates.
  • Obtain a better picture of the effectiveness of different types of action to promote water efficiency. OFWAT need toestablish a clear plan for improving the measurement of the outcomes achieved by companies from their water efficiency work to assess which measures are worthwhile.
  • Promote greater sharing by companies of the results of their monitoring of the effectiveness of action to promote water efficiency. OFWAT should consider how best to disseminate the results of companies’ work on water efficiency by encouraging them, or providing them with incentives, to share information that at present companies keep to themselves.

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