Anglian Water will have to repay more than £20m to customers through lower bills after it failed to meet key targets.

It comes after the water company was found by regulator Ofwat to be “falling short” on performance standards relating to sewage leaks, customer service, and reducing pollution.

Following an assessment by the independent body, Anglian Water was categorised as “lagging”, the lowest possible category, alongside six other water providers. 

It will now have to pay back £22m to customers by reducing their bills in 2024-25.

It comes after the company, which is £6.6m in debt, was identified as the worst-performing in the country for self-reporting incidents of pollution.

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Ofwat chief executive David Black said that while price reductions might be “welcome to bill payers”, it was “very disappointing news for all who want to see the water sector do better”.

An Anglian Water spokesman said: “We are disappointed to be listed as a lagging company,. However, following two extreme climate events last year, we expected our performance to drop as our infrastructure came under unprecedented pressure.

“The work we’ve undertaken since then focuses on how we are resilient to these challenges in the future, as they are felt more acutely by our region than any other. 

“Our proposed business plan for 2025 –2030 will see our largest ever investment in securing water supplies against the risks of extreme weather.”

Earlier this year Anglian Water was told it needed to improve after the Environment Agency handed it a two-star rating in its latest annual report.

It was found to be responsible for 255 pollution incidents in 2022, including 11 serious incidents.

The company told county councillors earlier this year that it would take “decades” and millions of pounds to install the infrastructure to stop raw sewage being released into Norfolk rivers.