YORKSHIRE Water will have to pay a £36 million penalty for underperformance, a regulator has said.

Ofwat published its annual performance report on water firms today.

It said water firms across the country will be forced to hand back a total of £157.6m for missing key targets, including on reducing pollution and cutting supply interruptions.

Ofwat said customer bills will be slashed in 2025-26 to reflect the penalties, with the total rebates calculated in December.

Not one company achieved the regulator's top category of 'leading', with Bradford-based Yorkshire Water being labelled 'average' - although this was an improvement on its previous performance rating of 'lagging behind'.

A Yorkshire Water spokesperson said: "Last year, we made some great improvements in reducing leakage, which we know is a key area that our customers care about.

"We're pleased this work has been recognised and our performance rating has been improved by Ofwat.

"We also made progress versus the rest of the industry in how our customers perceived us and we are continuing with this improvement this year.

"We also delivered a significant increase in registering customers who may need extra help from us.

"We also made substantial investment in our wastewater network and continue to do so.

"Unfortunately, in other areas we did not meet some of our commitments and, as a result, our customers will receive an adjustment to our bills from April next year.

"Despite this, we remain committed to doing right by our customers and delivering more of what they expect.

"We are in the process of investing almost £800m in our infrastructure across the region this year, which includes £180m to reduce storm overflow use and improve water quality in our region's rivers - another key area our customers really care about. ​

"Making long-term, lasting change takes time, but we are committed to doing more of what our customers expect and will publish a service commitment plan in November.

"We have also submitted plans to Ofwat outlining our largest ever environment investment between 2025 and 2030 and we look forward to their decision and delivering in the next five years."​

David Black, chief executive of Ofwat, said: "Companies must implement actions now to improve performance, be more dynamic, agile and on the front foot of issues - and not wait until the Government or regulators tell them to act."​