South West Water told its leak failures are raising risk to customer supplies

Regulators have warned South West Water that its repeated failure to curb leaks is leaving customers more exposed to supply losses, with parts of the region still in severe drought.

In a letter to the privatised company, which supplies 1.8 million people across the south-west of England, Ofwat, the Environment Agency and the Department for Environment, Food and Rural Affairs said it had missed targets for cutting leaks and repairing burst pipes for seven consecutive years.

"Leakage is 18.5% above forecast .. and increased since the previous year. Given the ongoing drought conditions, these shortcomings are placing customers at a greater level of risk. This is not acceptable," the regulators wrote.

The warning surfaced as the National Drought Group prepared to meet on Thursday, with around 82% of England still in drought and severe drought declared in parts of Devon, Cornwall, Dorset, Somerset, East Sussex and West Sussex. The Met Office has said 120% of typical rainfall is needed over seven months to fully end the drought.

According to the letter, South West Water loses 113.5 million litres a day from its pipes and infrastructure, roughly the volume of 45 Olympic swimming pools and 5.7 million litres more than last year. The regulators said this poses a risk to customers' security of supply.

About 325,000 people and thousands of businesses in Exeter and mid and east Devon are affected by the severe drought and could face regular supply interruptions in the coming weeks and months, potentially forcing school closures and causing economic losses. The company has written to households urging them to cut water use, without acknowledging how much its own leakage contributes to the risk of outages.

In the joint letter dated 26 October, the regulators and government told the company: "Achieving your planned leakage reductions is reputationally important as you are asking customers to reduce their water use." They added that "a trend of rising leakage .. represents a risk to your customers' security of supply," and said the failures had weakened confidence that the company can maintain supplies and avoid emergency river abstraction that would damage the environment.

After the driest April to September in more than a century, storage at the Wimbleball reservoir, which serves parts of Devon, Somerset and west Dorset, stands at just 16%, with concerns also growing for several smaller reservoirs in Devon and Cornwall.

Julian Brazil, leader of Devon county council, said: "Householders and businesses have been told to save water to avoid worse drought restrictions and that it was all down to the dry weather. Now we learn South West Water has been continually warned for seven years it's not doing its bit on leakage and they are still failing." He added that customers had been paying the highest bills in the nation since 1989 while the company polluted bathing waters, lost nearly one in five litres on its network and paid out billions in dividends.

The warning coincided with a government announcement that eight new regional water councils will be created to bring local leaders, customers and businesses together to set priorities for water companies and shape billions of pounds of investment. South West Water must present an action plan on leaks to the government and regulators within six weeks. The company's drought programme director, Richard Stanbrook, said recent rainfall was helping but that "pressure on supplies remains significant," adding: "We are repairing leaks, moving water around our network and taking every practical step to strengthen supplies and reduce water losses."