Leakage has been one area that all companies have focussed on to avoid regulatory penalties in previous years since the 1989 privatisation, but the 2010-11 leakage performance is the worst since the water companies were established. Six of the ten failed their leakage targets, whilst none of the twelve smaller water only companies failed theirs. For the second year running Yorkshire Water failed theirs by 9.4% or 28Ml/day, and are committed to invest £33m on their water supply infrastructure to guarantee meeting their target for the next three years. Amazingly, Thames overachieved by 1.3% or 9Ml/day when there is no future profile for leakage reduction - a huge over-investment.

It will be interesting to see how Ofwat handle this challenge of getting leakage targets back on track in 2011-12.

Meanwhile MCL Consultancy have been approached by a number of companies keen to improve their contract management on water supply networks to assist in reducing the cost challenge of leakage target achievement. The performance contracts developed by MCL in South West Water and implemented in 2008-9 are starting to bear fruit as there has been a significant shift from reactive to planned work, giving the company the freedom to manage their capital resources, particularly on the leakage plan, to ensure annual targets are met.