actions to safeguard the reliability of supplies.
Water companies must plan to meet customers' demands even during dry
there were to be a serious drought.
The Security of Supply Indexpublished shows that there is no
room for complacency and highlights areas where more work needs to be
done by some water companies to ensure the continuing reliability of
future supplies. Ofwat also reports that most water companies have
made progress in cutting back on leakage from the mains.
The index is being used by Ofwat to monitor how companies manage the
risk of water supply restrictions in future dry spells. The index
puts particular emphasis on 'headroom' - the difference between the
amount of water each company has available, and how much it must put
through its mains network to meet customer demand. The report
includes for the first time information on critical summer peak
demand when supply systems are under the greatest stress.
The report reveals that 17 of the 23 companies in England and Wales
meet their targets for security of water supplies. Ofwat cautions
that this should not be taken as a guarantee that there will not be
restrictions in these areas in unusually long dry periods, such as we
are currently experiencing. Some companies do need to do more work to
improve the position and manage risks down to an acceptable level,
and Ofwat will be monitoring progress with their plans annually.
Much of the success in avoiding restrictions has been due to the huge
reduction in water lost by leakage from the mains. Although leakage
rose slightly last year, it has been cut by more than 25%
over the last seven years. This is saving around 1.3bn litres
of wate r every day, enough to meet the daily needs of nearly 10
million households. Most companies are now operating at their
economic level of leakage.
Regrettably, leakage rose in 2002/03 at two companies - Severn Trent
and Thames Water. At the former, most of the rise has been attributed
by the company to changes to the way data is collected and
interpreted. This is now the subject of an independent investigation
being jointly carried out for Severn Trent and Ofwat.
At Thames Water, which supplies more than 11 million people in
Greater London and surrounding areas, Ofwat has imposed stringent
targets to ensure leakages are rapidly reduced over the next three
years. Reports show that the company is now making progress in
achieving this in most areas, with the exception of north London.
Bill Emery, Ofwat's director of costs and performance said: 'Customers value reliable supplies very highly. By using the securityof supply index we can keep close tabs on how companies plan to meet
customers' needs. While there were no restrictions on supplies this
summer, there is no room for complacency, and the index points up
areas where more needs to be done to ensure reliable supplies in the
1. The director general of water services is the economic regulator
of the water and sewerage companies in England and Wales. He
exercises his powers in a way that he judges will allow them to carry
out their functions properly, and finance them. Customers' interests
are represented by WaterVoice.
2. All companies already have contingency plans for limited
restrictions which might have to be introduced in exceptional
climatic circumstances, probably less than once every decade.