Thames Water has been named among the worst performing water companies in England by the regulator.
Northumbrian Water, Southern Water, South West Water, Thames Water, Welsh Water and Yorkshire Water were singled out for their poor performance by Ofwat in its annual review.
The report looked at the performance of the 17 largest water and wastewater companies in England and Wales.
In November Ofwat required Thames Water to return more than £50million to its customers after missing key performance targets.
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Ofwat said despite some improvements across the industry, it is "deeply concerned" and these companies must now explain what has led to their poor performance and "present a clear action plan to turn this around".
Across all companies Ofwat found in 2021-2022 the number of serious pollution incidents in England and Wales increased.
Only four companies met the requirements for reducing sewage flooding in customers' homes.
Companies only spent 68 per cent of what they forecast they would invest in improvements, said the report.
Ofwat said that most companies "have again failed to clearly explain" how dividend payments to shareholders and payments to staff are linked to their performance.
There was progress towards reduction of leaks "but there is still a long way to go".
David Black, CEO said: "In too many areas, water and wastewater companies are falling short when it comes to looking after customers, the environment and their own financial resilience.
"We are clear; these companies need to address this unacceptable performance as a matter of urgency.
"For some companies poor performance has become the norm. This cannot go on.
"We are requiring the worst performers, including Thames Water and Southern Water, to return around £120million to customers."
The regulator said it is looking at new licensing conditions "with a customer-focused condition" to increase companies’ customer focus.
Mr Black said: "Separate from today's reports, we are taking enforcement action on wastewater treatment works compliance, well as consulting on licence changes that will help us drive through the transformation needed across the water industry."
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This story was written by Miranda Norris, she joined the team in 2021 and covers news across Oxfordshire as well as news from Witney.
Get in touch with her by emailing: Miranda.Norris@newsquest.co.uk. Or find her on Twitter: @Mirandajnorris
Profile: Miranda Norris Journalists news from the Oxford Mail
Profile: Miranda Norris Journalists news from the Oxford Mail
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