Committee publication · Correspondence · 10 June 2025
Correspondence from Peter Perry, CEO, Dŵr Cymru (Welsh Water) regarding Reforming the water sector inquiry, dated 2 June 2025
From: Environment, Food and Rural Affairs Committee
Inquiry: Reforming the water sector
Summary
Peter Perry, CEO of Welsh Water, responds to the Environment, Food and Rural Affairs Committee's 13 May inquiry letter on water sector reform. The letter addresses remuneration policies, asset replacement rates, water poverty support, and data transparency. Welsh Water proposes increasing mains renewal from 0.21% to 0.43% in AMP8, maintains £73 million annual spending on affordability schemes, and commits to publishing drinking water quality data by summer 2025.
Key findings
- Welsh Water's AMP7 mains renewal rate was 0.09%, rising to 0.21% in 2024–25, with a proposed jump to 0.43% in AMP8—still below the 1% industry benchmark for sustainable 100-year asset lifecycles
- Annual variable pay opportunity maxes at 100% of salary; long-term variable pay for the Chief Executive reaches 500% of salary over the 5-year regulatory period, with performance metrics tied 80%+ to customer and operational measures
- 12% of Welsh Water's customer base (170,892 households) estimated as water poor before social tariff support; 9.6% after support. Company supports approximately 137,000 customers (9% of base) via social tariff at £73 million over AMP8
- Behavioral change campaigns address blockages (£40,000–£166,000 annually), water efficiency, winter pipe protection, and reservoir safety, justified by operational cost savings (2,000 blockages/month cost £7 million annually)
- Welsh Water committed to publishing domestic drinking water quality data via Stream Open Data Portal by end summer 2025, and raw water reservoir storage data targeting September 2025
Tone
FactualTopics
Key actors
Peter Perry, Welsh Water (Dŵr Cymru), Alistair Carmichael MP, Environment, Food and Rural Affairs Committee, Ofwat, Drinking Water Inspectorate, Frontier Economics, Department for Work and Pensions
Notable line
“While the proposed AMP8 rate of 0.43% represents a substantial improvement, it is still below the level many experts consider necessary for long-term sustainability.”
Key Quotes
“During AMP7, our mains renewal rate was 0.09%, reflecting a period where investment was primarily directed toward other priorities such as environmental compliance, leakage reduction, and customer service improvements.”
“… clearing 2000 blockages a month costs us £7 million a year and these blockages are largely caused by items flushed down toilets and sinks that shouldn't be such as wet wipes, fat, oil and grease).”
“The level of the company contribution to social tariffs (and other affordability support) in our plans for 2025 to 2030 is £73 million, which is consistent with the level of support in 2020 to 2025 in real terms despite recent periods of high inflation.”
“This funding is made possible by our not-for-shareholder model.”
“Wales has the third highest IMD score in the industry meaning we serve some of the most deprived areas.”
Source · parliament.uk record ↗