- Drinking Water 2025 – Summary of the Chief Inspector’s report for drinking water in Wales
- Foreword
- Introduction
- Water supplies and testing
- Compliance with standards
- Learning from compliance failures
- Learning from events
- Consumer contacts
- Asset health
- Water safety planning and risk assessment
- Poly and perfluoroalkyl substances (PFAS)
- Audit programme
- Recommendations
- Enforcement
- Security and Emergency Measures Direction - SEMD
- Network and Information Systems - NIS
- Materials in contact with drinking water (Regulation 31)
- Research publications
- Whistleblowers
- Working with stakeholders
Enforcement
The Inspectorate publishes the drinking water quality legal instruments on the website under company improvement programmes. Security (SEMD and NIS) legal instruments are considered sensitive and therefore are not published in the public domain. Table 18 summarises the total legal instruments served in 2025.
| Type of legal instrument | Number | Companies |
|---|---|---|
| Regulation 27(4)* notice for improvements to water safety plans | 1 | Dŵr Cymru Welsh Water |
| Regulation 28(4)* notice relating to risks identified in water safety plans | 1 | Dŵr Cymru Welsh Water |
| Formally acknowledged improvement actions | 1 | Dŵr Cymru Welsh Water |
* The Water Supply (Water Quality) Regulations 2018
Details of enforcement action taken by the Inspectorate in the first half of 2025 was published in the interim report. Therefore, this report only contains details of enforcement served in the second half of 2025.
Enforcement served in Wales, in the second half of 2025
A notice was served on Dŵr Cymru Welsh Water under regulation 27(4) for improvements to its risk assessment methodology. An audit of the Drinking Water Safety Planning methodology and risk records identified deficiencies in meeting regulations 27 and 28. The notice requires updates to the methodology, including how risk assessments are undertaken and records are reported, to meet regulatory duties. These actions will be carried out alongside required updates following the issue of Information Letter 04/2025 on Drinking Water Safety Planning guidance. Following these changes, new risk assessments are to be provided to the Inspectorate by 21 October 2027.
One notice was served on Dŵr Cymru Welsh Water under regulation 28(4). Audits carried out at Felindre works and Llan y Mawddwy works identified deficiencies relating to disinfection. A similar notice was served in 2024 for works with off-site assets, such as contact mains extending beyond the site perimeter. As the deficiencies identified were not limited to the two works audited, a further company-wide notice was served to cover all works. This will improve disinfection management at 45 works, benefiting 2,238,526 consumers.
Enforcement Developments
In 2024, the Inspectorate reported that the milestone and closure reporting portal went live for drinking water quality legal instruments. In 2025, the portal was expanded to include a change application process and a facility to record the annual progress reporting. In future developments, the Inspectorate hopes to expand this facility to include NIS and SEMD legal instruments.
Transformation Programmes
Dŵr Cymru Welsh Water was placed into a transformation programme in June 2024, with five transformation notices issued from late 2024 to early 2025. The company is currently managing a total of 43 legal instruments across drinking water quality, NIS and SEMD, with two due for completion in 2026.
Since commencing this programme, the company has implemented a ‘Water Quality First’ initiative to reinforce the strategic importance of water quality across all operational areas.
Compared with other water companies at a similar point in their transformation journeys, Dŵr Cymru Welsh Water’s current position suggests that its transformation programme is more mature in structure, but that operational outcomes remain weaker and slower to improve. As with other large companies subject to enhanced regulatory oversight, such as Thames Water and Southern Water, Dŵr Cymru Welsh Water is managing a significant portfolio of enforcement activity and is seeking to strengthen governance, assurance and culture. However, it remains behind stronger-performing companies, such as United Utilities and Severn Trent, where sustained investment and more effective asset management have delivered lower compliance risk, fewer events and better consumer outcomes. Dŵr Cymru Welsh Water’s ongoing challenges with network discolouration, ageing assets and operational inconsistency mean it currently sits at the pressured end of the industry, even taking into consideration progress in governance and regulatory engagement.
Dŵr Cymru Welsh Water has made clear structural progress through its transformation activities “Water Quality First”, particularly in relation to governance, capability and regulatory engagement. This structure, established in year-one of transformation included dedicated leadership and new roles within dedicated teams, a governance framework and steering groups for decisions and direction, and formalised Key Performance Indicators (KPIs) being measured and reported through the governance framework. However, there is evidence of a loss of momentum in transformation leadership, most recently during 2026, following restructuring of the company with approximately 500 staff losses from across the business, including water quality teams. During the restructuring, assurances were provided by the company that front-line operations and transformation progress would not be impacted.
The improvements that have been made have not yet translated consistently into sustained operational performance, and material regulatory risk remains high. The key contributors to the company’s CRI score also remain unchanged, with network iron failures, coliform failures and taste and odour issues continuing to drive poor performance. When looking at events, particularly recovery and investigation, there are recurrent issues such as delayed escalation, inconsistent adherence to procedures, weak sampling strategies which results in poor evidence of water quality, understanding of the extent of the impact and compromised root -cause analysis.
The Inspectorate has communicated to the company that the following must be areas of focus, to achieve the water quality outcomes expected.
- The delivery of long-term solutions rather than relying on short term management, particularly when inferior outcomes are achieved with the latter.
- Re-focus of investment priorities, particularly risk of the supply of unfit water which is an offence, and the impact on customer experience.
- An understanding of asset health, asset performance (including visibility) and asset suitability.
- Consistent adherence to Governance processes and operational procedures.
- Alternative supply arrangements
In summary:
- The transformation programme is well established and strategically aligned.
- There are signs of improvement in early indicators; but
- The company is operationally reactive rather than consistently preventative.
- Core water quality outcomes, asset resilience and compliance consistency remain below expected levels, requiring continued regulatory scrutiny.
The company has regular meetings with the Inspectorate’s liaison team, and six-monthly transformation meetings are held between the Inspectorate and notice sponsors within the company. During 2025, the company’s contribution to monthly meetings improved, and these forums are now used effectively to discuss notice direction, review progress and present information for early feedback before formal submission. This level of participation demonstrates a positive attitude towards the transformation programme. The company is encouraged to continue applying this proactive approach.
Despite overall progress, several setbacks occurred during 2025. Key milestones associated with legal instruments were missed, and the company did not notify the Inspectorate of delays until the milestone reporting deadlines. This reflects weaknesses in governance arrangements, oversight of legal instrument delivery and communication practices. This was particularly concerning given the frequency of legal instrument-focused meetings. The company has been reminded of the requirement to notify the Inspectorate at the earliest opportunity when risks to milestone delivery arise, and the Inspectorate has started to see improvement in this area.
The company’s successful completion of the service reservoirs and tanks notice was acknowledged in the Inspectorate’s 2024 annual report. This was under challenging conditions and was commendable. However, it has since become evident that prioritising this notice adversely affected progress on other legal instruments. In addition, a milestone within the same notice was identified during 2025 as not having been completed to the Inspectorate’s satisfaction. As a result, a subsequent regulation 28(4) notice was served in early 2026, to address deficiencies with sampling facilities.
A significant challenge for Dŵr Cymru Welsh Water is its discolouration performance, which is subject to a notice. The company did not achieve the AMP7 target in the notice. Biannual discolouration strategy meetings are now taking place between the company and the Inspectorate, and the company’s strategy is maturing. However, this has not yet translated into improvements in discolouration contact rates. It is not acceptable for consumers to receive drinking water with an objectionable colour, and the Inspectorate has imposed a stretching AMP8 target for discolouration improvement. The AMP7 target was 1.4 contacts per 1,000 population; the company achieved 1.8. The AMP8 target has been set at 0.7 contacts per 1,000 population by the end of the AMP period, which will require significant improvement. Progress towards this target will be monitored closely and the Inspectorate will consider further enforcement where improvements are not made.
Enforcement Performance Metric
During 2025, the Inspectorate developed and tested a new metric to measure company performance against obligations contained within legal instruments. The metric helps the Inspectorate direct enforcement resource to companies requiring the most attention and provides a transparent means of demonstrating company performance.
Every legal instrument served is scored, using a five-by-five matrix, which has a set of rules attached, which inspectors follow for consistency.
The first score, assigned when the legal instrument is created, is the seriousness score. This score reflects the origins of the legal instruments and ranges from voluntary programmes, through routine enforcement action, to escalated and transformation enforcement. The criteria are listed in table 19.
| Seriousness | Score |
|---|---|
| Escalated enforcement – generally, enforcement orders but other forms too | 5 |
| Further (additional) enforcement – “child” legal instruments, transformation legal instruments | 4 |
| Routine enforcement (realised breaches) – such as compliance assessments, events, regulation 26 breaches, data driven, consumer complaints | 3 |
| Routine enforcement (potential breaches) – such as likely to breach, risk of breach, audit findings, risk assessments | 2 |
| Proactive schemes – such as AMP schemes, voluntary undertakings | 1 |
The second score is a Red, Amber, Green (RAG) (expanded to include Amber + and Red +) status of the progress of the legal instrument. This score is assigned when the legal instrument is first created but is changed as required throughout its lifetime based on the progress of delivery. The criteria are listed below:
Red+ (5)
- The Inspectorate has rejected a change application for date extensions to the completion date of the legal instrument.
- Any delays that affect the end date of the legal instrument.
- Once a notice is in Red+ status, it can only ever recover to Amber +.
Red (4)
- The most recently submitted milestone is delayed or was delivered late.
- The most recently submitted milestone is insufficiently evidenced or incomplete. This is where a report is rejected entirely, it does not apply for routine follow-up questions.
- The Inspectorate has been notified that a future intermediate milestone is going to be delayed and there is no way the company can meet it.
- The Inspectorate has rejected a change application for date extensions for intermediate milestones.
- Last-minute notification of not going to meet targets, when clearly company have known for some time.
- Missed completion report deadline.
- Red applies until the next milestone is received, when the score may reduce to Amber or Amber +.
Amber+ (3)
- Escalated enforcement (see table above) always begins at Amber+
- New child legal instrument from a delayed legal instrument begins at Amber + (for example, an individual service reservoir (SR) being removed from a wider service reservoir notice).
- Change application has been submitted and accepted, with a new final delivery date.
- Legal instrument was previously at Red+ status, but company have resolved issues and improved management of notice.
- Cannot go lower than Amber+ once here.
Amber (2)
- Intermediate delay which does not affect the final date of legal instrument.
- There have been delayed/late milestones, but scheme is now on track.
- Previously red, but company have resolved the issues and improved the management of the legal instrument.
- Cannot go lower than Amber once here.
Green (1)
- Default option for all new legal instruments.
- All milestones are on target or completed on time.
- Change of solution which does not affect the final delivery date (ie the company have found a cheaper or quicker way of delivering the scheme within the notice period.)
- The Inspectorate direct a future change to a scheme (for example, the publishing of new PFAS guidance, which affects PFAS undertakings)
- The Inspectorate has initiated a change.
- Small administration changes (such as an annex update to a discolouration notice).
- Cannot return to green once amber or red.
The metric is calculated in a similar way to the Recommendations Risk Index. It recognises that risk will always exist and that larger companies, with larger catchments, more treatment works, more treated water storage, greater lengths of mains and more connections, will have higher residual risk. Total scores for each company are compared with those of the whole sector and normalised according to the proportion of the overall population supplied, producing an expected score for each company. Expected scores are then plotted against actual scores using linear regression. The upper 95% confidence value line is added to identify statistical outliers, producing Figure 51, the Enforcement Performance Metric for the end of 2025.
Figure 51 – Enforcement performance metric
During the first half of 2025, the Inspectorate applied a period of grace to companies for NIS and SEMD legal instruments, as the reporting processes and requirements were new to these areas. The Inspectorate sought to support, educate and advise, rather than reprimand, where items were delivered late or incomplete. While the Inspectorate will continue to provide advice on the metric, the period of grace has now ended and NIS and SEMD legal instruments will be scored appropriately. At present, there are only a small number of NIS and SEMD legal instruments compared with the total number of legal instruments. These are therefore included with drinking water quality enforcement in a single measure. This will be reviewed in future and they may be separated if there is benefit in doing so.
The metric shows that, as of 31 December 2025, no company operating in Wales was above the 95% confidence interval line. Dŵr Cymru Welsh Water has several transformation legal instruments, which carry high seriousness scores. The company will need to ensure timely delivery of these instruments to prevent increased RAG scores and the associated multiplication effect.