Ofwat, the economic regulator of the water and sewerage sector, has reported that although companies continue to deliver good levels of service to most consumers, last year six companies failed to meet their leakage targets.

The companies that failed were: Cambridge (1.4% over its target); Dee Valley (2%); Northumbrian (Essex and Suffolk 1.5%, North East 3.3%); Southern (3.3%); Veolia Central (3.6%) and Yorkshire (7.3%)

Ofwat's Service and Delivery report scrutinises how the companies performed in delivering services to customers in England and Wales in 2009-10.

In general companies continue to deliver safe, reliable supplies, yet there are still areas for concern, including performance on managing leakage.

The leakage failures occurred in the context of the coldest winter for over 30 years. Cold weather can make tackling leakage harder. Snow covered ground can make identifying leaks more difficult, and all companies reported high numbers of burst pipes because of ground movement caused by freezes and thaws.

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Regina Finn, Ofwat's Chief Executive Officer said: "People can shop around for the best deal on many things, but not water. We are here to make sure customers get a fair deal. Services are generally improving, but there are still areas for concern.

"We take any leakage failures seriously. Most companies stepped up to the challenge of tackling leakage during a particularly harsh winter. Those who haven't, we have put on-notice.

"If companies continue to underperform, we will take action. In the last five years, companies have had to pay out more than £500m, from their own pockets, following underperformance. We've made sure that the bulk of this money has been spent on giving something back to customers - either through reduced bills or investment in improving services.

"That's why when certain companies consistently failed to manage leakage, we made sure they invested an extra £195 million of shareholders' money putting the problem right.

"Although last year's leakage failures did not put customers' supplies at risk, future challenges such as climate change and population growth mean that valuing this precious resource is more important than ever before."

(CD/GK)