Ten penalised and six rewarded from 2025/26 ODIs

(by Verity Mitchell)

Ofwat has published its draft performance penalties for the 2025/26 financial year under its Outcome Delivery Incentives (ODI) regime. The penalties are expected to result in a net £240m reduction in customer bills, of which £107m will be returned in 2027/28. The companies have already reported these. Ofwat is merely consolidating the data.

By far the worst hit companies were Yorkshire and Thames, which incurred ODI penalties of £75m and £45.8m respectively, for underperforming against commitments they made for the first year of the AMP8 period across leakage, compliance with discharge permits and bathing water quality.

Severn Trent and Northumbrian were the only two companies to achieve significant ODI gains over the year, with respective rewards of £41.8m and £35.9m. The others to finish in a positive position were Anglian, Wessex, Portsmouth and South Staffs.

A government statement criticised the rewards. A spokesperson said: “This Government won't allow customers to be treated as a blank cheque, and we are committed to protecting households from cost-of-living pressures. We will always challenge water companies where they seek to pass unnecessary costs onto households.”

The full Ofwat assessment on company performance against targets will be published in the Operational Performance Report (previously the Water Company Performance Report) later this month.