Committee publication · Correspondence · 10 June 2025
Correspondence from Mark Thurston, CEO, Anglian Water, regarding Reforming the water sector inquiry, dated 3 June 2025
From: Environment, Food and Rural Affairs Committee
Inquiry: Reforming the water sector
Summary
Mark Thurston, CEO of Anglian Water, responds to the Environment, Food and Rural Affairs Committee's follow-up questions on water sector reform. The letter addresses remuneration governance, communications spending (78p per household annually), asset replacement rates (increasing water mains renewal from 0.13% to 0.5% in AMP8), water poverty support (doubling cross-subsidy to £24 and reaching 12.7% of customers on Priority Services Register), and data transparency initiatives.
Key findings
- Anglian Water is implementing an Annual Bonus Plan post-AMP7 with 50% environment, 20% customer, and 30% infrastructure weighting, aligned with Ofwat recommendations
- Communications spending averaged 78p per household per year over five years; no legal fees spent on actions against regulators
- Water mains replacement rate increasing to 0.5% annually in AMP8, but company argues sustainable performance requires 0.9% (European average) and Ofwat acknowledges need for 0.6–0.8%
- Water poverty support expanded: cross-subsidy doubled from £12 to £24 in AMP8, providing up to 50% discounts for 230,000 customers and new Medical Needs Discount funded by owners
- Priority Services Register enrollment at 12.7% (May 2024), exceeding industry average of 5–6%; 9-month period signposted £18.3m in unclaimed benefits to customers
Tone
ProceduralTopics
Key actors
Mark Thurston (CEO, Anglian Water), Alistair Carmichael MP (Chair, EFRA Committee), Kath Durrant (Remuneration Committee Chair), Sir Jon Cunliffe (conducting sector review), Ofwat, Experian, Consumer Council for Water (CCW)
Notable line
“We believe this is replicated across other asset classes and therefore we need to see sustained and significant increases in civil engineering asset renewal.”
Key Quotes
“… we have spent 78p per year, per household bill on our communications over the last five years.”
“… we have not initiated any legal action against our regulators, so no money has been spent on these activities.”
“We agree that these replacement rates of civil engineering asset, such as pipelines and structures, is far below sufficient and have been making this point to our stakeholders consistently for some time …”
“… a doubling of the cross-subsidy from £12 in AMP7 to £24 in AMP8, has strong support from customers and stakeholders.”
“The core principle we hold ourselves to is that all customers seeking support should be provided with some assistance that will ease their position around affordability.”
Source · parliament.uk record ↗