Our leakage performance

We work with Ofwat, our regulator, to set stretching targets for reducing our leakage over a 5-year period. We report annually to Ofwat on how we’re doing against our regulatory target, which is our 3-year average leakage level. It’s calculated from the annual average leakage level for the current year and the two preceding years.

The starting position is the baseline leakage level. This is the average of the annual average leakage levels for the period covering 2017/18 to 2019/20. For the regulatory period from 2020/21 to 2024/25, we’ve committed to reducing our baseline leakage level as follows:

We also set an internal leakage target. This is the target we use in this report. It’s the annual leakage level we calculate that we need to achieve to meet (or better) our regulatory commitment as set out in the table above.

For 2021/22, we’ve set an internal leakage target of 568 Ml/d. To achieve this, we develop monthly performance targets and we track our performance throughout the year.

Our final leakage position for 2021/22 will be available after we’ve completed our year-end assurance and audit process. Following our audit, we’ll publish our final leakage performance for the year in our Annual Report in July 2022 and will also update this report.

Highlights from the last quarter: October – December 2021

• Leakage from April 2021 to December 2021 was 577 Ml/d – that’s 14 Ml/d above our internal target for the year to date
• Between October and December 2021, we fixed 14,912 leaks and prevented 102 Ml/d of leakage – that’s over 40 Olympic size swimming pools

What’s our leakage level?

The graphs below show the estimated amount of water lost from our network this year compared with the forecasts in our leakage reduction plan.

Graph 1: average leakage we’ve achieved each month, compared to the monthly average leakage level we would expect if we deliver our leakage reduction plan

Graph 2: our year-to-date average. This is the average of our monthly leakage levels from April to date compared to our forecast.

The solid blue line – our reported leakage – shows our actual leakage level, based on our daily operational data. The dotted lines show our forecast leakage level if we deliver our plan. Together, these three lines represent three bands:

• The central band (the dotted blue line) shows where we expect leakage to be if everything works out as we initially predicted
• The upper and lower bands (the orange and green dotted lines) reflect the possible impact of risks to our plan. These risks might include adverse weather, or weather that’s milder than we expected. Our plan might also be affected by finding more or fewer large leaks than we predicted.

Leakage tends to increase in winter when colder weather causes pipes to contract, increasing the chance of bursts. As we would expect then, our leakage increased in October and then more sharply in November, as temperatures cooled.

Each quarter, we review the assumptions we use to calculate leakage. These regular updates have been particularly important since the Covid-19 pandemic has changed our customers’ demand patterns for water. This quarter, we revised our night usage calculations, which meant that our calculated leakage level increased by around 16 Ml/d from the start of the year. This is shown in Graph 1 as the solid blue line (reported leakage) crossing above the dotted orange line (upper forecast).

At the end of each year, our final reported annual average leakage number is calculated using the water balance methodology that is set out in Ofwat’s reporting guidelines. Following our audit, we’ll publish our final leakage performance for the year in our Annual Report in July 2022 and will also update this report.

How much water is that?

A leakage level of 615 Ml/d (our average monthly leakage in December 2021) is about 24% of the total water we supply. It’s equal to 246 Olympic size swimming pools full of water.

How many leaks have we fixed?

• We fixed 14,912 leaks between October and December 2021 – below the 19,215 that we’d planned
• That’s 1,065 leaks fixed on average each week
• Our repairs prevented leakage of more than 81 Ml/d over the quarter^*
• All of our leakage reduction activities (including our pressure management and water efficiency initiatives) saved 102 Ml/d of water from being lost.

We’ve fixed fewer leaks than we’d planned to due to the challenges of Covid-19 and difficulty in recruiting, which have both continued to impact our resources. By working smarter, using innovative technology and prioritising larger leak repairs, we have improved – we fixed more leaks than reported for the previous quarter (13,527).

However, we’ve also decided to transition away from our current outsourcing delivery model over the coming year. Going forward, we’ll be doing high volume repair and maintenance work and planning in-house. That means that we’ll be self-delivering the work that most impacts our customers.

^* This is the volume of water saved based upon fixing non-visible and customer leaks. We don’t include visible leaks because they’re not considered to reduce the underlying level of leakage.

Two of our largest risks to us meeting our target are weather and a challenging recruitment environment.

Having accurate and clear leakage reporting is an essential part of managing and reducing leakage efficiently, to ensure that we make best use of available data and resources. Our Leakage Reporting and Insight Improvement Programme (LRIIP) is designed to improve confidence in our data and processes, improve resilience, provide greater accuracy and consistency of reporting through assurance and demonstrate how we will use insight to effectively deliver the improved leakage performance expected by our customers and stakeholders.

The LRIIP comprises 21 key deliverables, across five themes related to:

• Data quality improvements
• Simplify/digitalise the water balance
• Create a self-assurance culture
• Implement assurance
• Enhance the capability and capacity of the team.

13 of the 21 deliverables are complete, with the other eight on track to be delivered by their due date. We report regularly on the delivery of LRIIP to Ofwat.

• Jargon buster
• Glossary of Terms used in this report